[Click eStock] Korea Circuit, Best Performance This Year 'Target Price Raised'

[Asia Economy Reporter Lee Seon-ae] Daishin Securities announced on the 28th that it maintains a buy rating on Korea Circuit and raises the target price by 18.8% to 38,000 KRW. This adjustment is due to increased sales and operating profit this year.

Park Kang-ho, a researcher at Daishin Securities, explained, "Korea Circuit is expected to achieve its best performance in 2022 on both standalone and consolidated bases."

On a consolidated basis, sales are expected to reach 1.82 trillion KRW (27.5% yoy), and operating profit 159.7 billion KRW (87.6% yoy). Standalone sales are estimated at 812.3 billion KRW (25.5% yoy), with operating profit at 95.9 billion KRW (61.1% yoy). Korea Circuit's printed circuit board (PCB) business is expected to see high sales growth due to stable sales and profitability, along with expanded production capacity of semiconductor PCBs (FC BGA). The semiconductor PCB sales ratio is expected to exceed 60% in 2022, with a gradual revaluation toward semiconductor PCBs anticipated.

The operating profit contribution from Interflex, a consolidated subsidiary, is expected to increase. Interflex recorded an annual operating profit of 3.2 billion KRW in 2021, marking a return to profitability after three years. Reflecting estimates of 41.7 billion KRW in 2022 and 59.1 billion KRW in 2023, improvements in consolidated performance are expected to begin with Interflex.

Meanwhile, on a consolidated basis, the operating profit for Q4 2021 was 41.4 billion KRW (return to profit yoy / 15.5% qoq), exceeding the previous estimate of 38.3 billion KRW, achieving strong results for two consecutive quarters. Sales increased by 76.3% yoy and 2.4% qoq to 415.4 billion KRW. Standalone (Korea Circuit) sales (185.2 billion KRW) and operating profit (22.9 billion KRW) rose by 40.3% yoy / 4.6% qoq and 183% yoy / 7.9% qoq, respectively. Excluding one-time items (bonuses and provisions), the actual profit is assessed to have been even higher.