[Click eStock] Korea Circuit, Strong Earnings but Undervalued Stock

On the 16th, the KOSPI opened at 2624.69, up 20.45 points (0.79%) from the previous trading day, as dealers worked in the Hana Bank dealing room in Jung-gu, Seoul. The KOSDAQ started at 862.24, up 9.16 points (1.07%), and the won-dollar exchange rate began at 1277.0 won, down 7.2 won from the previous trading day. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Hwang Junho] Daishin Securities maintained the target price of Korea Circuit at 38,000 KRW on the 17th.

Korea Circuit's consolidated operating profit for the first quarter of this year was 31.1 billion KRW, a 304% increase compared to the previous year. However, this was below the market expectation of 33.5 billion KRW. On the other hand, sales reached 410.8 billion KRW, a 38.5% increase compared to the previous year, exceeding expectations.

The reason for the strong performance was attributed to increased sales of semiconductor packages and the mix effect, which kept the overall operating profit margin at 7.6%, maintaining the level of the second half of last year (9.4%). The subsidiary Interflex also showed significant growth compared to the same period last year (operating profit of 7.4 billion KRW) due to strong sales of the Galaxy S22 Ultra model equipped with the S Pen.

Daishin Securities expects the strong performance of Interflex, a consolidated subsidiary, amid the semiconductor package boom, to maintain a significant improvement trend compared to the same period last year. Operating profit is analyzed to gradually increase to 35.1 billion KRW in the second quarter, 45.1 billion KRW in the third quarter, and 46.0 billion KRW in the fourth quarter this year.

Researcher Park Kang-ho of Daishin Securities stated, "Sales of FC BGA for North American telecommunications component companies are expected to begin in earnest, and mix improvement may occur in the second half of this year due to increased sales of FC CSP and FC BOC series," adding, "HDI printed circuit boards are expected to see improved sales and operating profit in the second half of this year compared to the first half due to increased supply for foldable phones."