[Click eStock] "Daeduck Electronics, Operating Profit to More Than Double Next Year... Target Price Up"

[Asia Economy Reporter Park Jihwan] Daishin Securities announced on the 2nd that it expects a turnaround in operating profit next year due to the full-scale mass production of FC BGA in the fourth quarter of this year for Daeduck Electronics, estimating an increase from 34.7 billion KRW this year to 76.5 billion KRW next year, more than doubling. Accordingly, it maintained a 'Buy' investment rating and raised the target price to 20,000 KRW.

Park Kangho, a researcher at Daishin Securities, emphasized, "The semiconductor PCB sales ratio is expected to grow from 57% last year to 65% in 2023, positioning the company as a specialized semiconductor PCB firm." He explained that the expansion of non-memory sales share from a memory-centric focus next year and the increase in high-growth automotive component non-memory (FC BGA) sales have led to an upward revision in valuation.

Researcher Park explained, "Operating profit next year is expected to increase by 120% year-on-year due to the expansion of semiconductor PCB share, the discontinuation of the cycle board (HDI) business in 2019, gradual changes in the mix of flexible PCB business, and portfolio restructuring centered on semiconductor PCB in 2022, marking a period of resurgence." The company is responding to various sectors from memory to non-memory, and from mobile to automotive and servers. After investing about 160 billion KRW in 2020 and 2021 to enter the FC BGA market and meet automotive non-memory demand, expansion into server and network fields is expected.

FC BGA is a high-end semiconductor PCB sector operated only by Japan's Ibiden, Shinko, and Samsung Electro-Mechanics. Researcher Park stated, "Although there is uncertainty in securing profitability due to small-lot, multi-product production, considering that order volumes have been secured in advance, the period for full-scale profit harvesting is expected to arrive next year."