[Click eStock] "Daeduck Electronics, Investment Expansion and High-Value Product Production... Focus on Performance Improvement Trend"

[Asia Economy Reporter Park Jihwan] Daishin Securities emphasized on the 15th that Daeduck Electronics shows an improving performance trend influenced by investments in FC BGA expanding its entry into the non-memory market, portfolio changes including the reduction of low-profit products, and other factors. Accordingly, they maintained a 'Buy' investment rating and raised the target price by 28.6% from the previous 14,000 KRW to 18,000 KRW.

Park Kangho, a researcher at Daishin Securities, stated, "With proactive investments in FC BGA, attention should be paid to the increase in non-memory sales in 2022 and portfolio changes focused on high value-added products," and forecasted, "an increase in weighting is necessary from a mid- to long-term perspective."

Daeduck Electronics' operating profit is expected to rise from 14.8 billion KRW last year to 49 billion KRW this year and 70.5 billion KRW next year. Notably, on the 2nd of this month, they disclosed an additional investment decision of 70 billion KRW in FC BGA. This means that a total investment of 160 billion KRW has been made since the new investment decision of 90 billion KRW in July last year.

With the expansion of AI, cloud, and 5G services, demand is increasing mainly for servers and networks, and new demand for semiconductor integrated solutions is growing due to the application of autonomous driving and the expansion of electric vehicle production. As a result, a shortage of semiconductor substrates in the FC BGA series is expected to cause price increases. FC BGA is a non-memory substrate compared to memory series. It is mainly applied to semiconductor substrates that serve as CPUs for PCs, servers, networks, and autonomous driving.

Daeduck Electronics is shifting its automotive portfolio sales from general MLB types to semiconductor (memory + non-memory) series substrates. Researcher Park Kangho predicted, "Flexible PCBs for camera modules will focus on folded and high-pixel cameras providing high zoom ratios, and sales growth is also expected in 5G antenna packaging (AiP) and SiP fields."