[Click eStock] "Daeduck Electronics, 1Q Operating Profit Expected to Soar 452% with Surprise Earnings"

[Asia Economy Reporter Ji Yeon-jin]

Daishin Securities announced on the 22nd that it expects Daeduck Electronics to deliver a 'surprise performance' in the first quarter of this year, significantly exceeding market expectations, and raised the target stock price from the previous 33,000 KRW to 36,000 KRW.

Daeduck Electronics is a specialized manufacturer of printed circuit boards (PCB) used in semiconductors (DRAM, NAND), communication equipment, smartphones, camera modules, automobiles, and set-top boxes. Its operating profit for the first quarter is expected to surge 452% year-on-year to 37 billion KRW. This performance greatly surpasses the previous estimate (33.9 billion KRW) and the consensus (30.7 billion KRW).

Sales are expected to reach 295.1 billion KRW, a 26.3% increase year-on-year, with substantial growth anticipated mainly driven by semiconductor packages. Park Kang-ho, a researcher at Daishin Securities, stated, "Since the merger with Daeduck GDS (December 2018), the quarterly operating profit is expected to exceed 30 billion KRW for the first time," adding, "The surprise performance exceeding consensus is attributed to the boom in semiconductor packages and the expanded mix effect, the start of sales in the new flip chip ball grid array (FC BGA) business, and the full-scale normal operation leading to deficit reduction, which is connected to overall profit growth."

The previously loss-making flexible PCB and MLB sectors have shifted to a revenue structure focused on profitability, and the rise in the KRW-USD exchange rate is also analyzed to have contributed to further improvement in operating profit margins.

This year’s operating profit is expected to reach a record high of 160.3 billion KRW, a 121% increase compared to the previous year. Researcher Park said, "As automotive electrification, autonomous driving, and electric vehicle production increase, demand for FC BGA products is also expected to rise," adding, "Based on advance orders from overseas customers and investment execution, the estimated sales are considered achievable, and a valuation reassessment of the FC BGA business is expected to take place at this point."