[Click eStock] "Daeduck Electronics, Q3 Profit Gains Momentum... Target Price Up 10%"

[Asia Economy Reporter Park Jihwan] Daishin Securities on the 15th maintained a buy rating on Daeduck Electronics, stating that following strong performance in the second quarter, full-scale profit generation is expected from the third quarter, and raised the target price by 10% from the previous 20,000 KRW to 22,000 KRW.

Park Kangho, a researcher at Daishin Securities, predicted, "The consolidated sales and operating profit for the second quarter this year are expected to exceed market forecasts, increasing by 5.7% and 91.3% from the previous quarter to 247.5 billion KRW and 10.4 billion KRW, respectively."

The strong second-quarter performance was attributed to △ increased MLB (multi-layer printed circuit board) sales for semiconductor inspection equipment and improved profitability for servers and networks △ improved product mix due to increased sales of memory-oriented semiconductor PCBs such as MCP (multi-chip package) and CSP (chip-scale package) △ margin improvement through price increases and sales expansion of non-memory FC CSP (flip-chip chip-scale package) △ and the turnaround to profitability of mobile-oriented R (rigid)/F (flexible) PCBs.

The investment focus is on the completion of the FC BGA (flip-chip ball grid array) factory, into which 160 billion KRW has been invested over the past two years, and the start of sales in the third quarter following product approval from clients. It is judged that the company will enter a phase of full-scale profitability improvement in the third quarter. Daeduck Electronics’ consolidated operating profit for this year is expected to increase by 193% year-on-year to 43.3 billion KRW, and next year to increase by 91% year-on-year to 82.7 billion KRW.

Researcher Park Kangho stated, "FC BGA’s entry into the non-memory semiconductor market will differentiate technology among PCB companies and raise valuation, leading to increased sales and profitability through portfolio strengthening focused on high value-added products."