[Click eStock] "Daeduck Electronics, Mid-to-Long-Term Growth Potential Valid... Maintain Overweight"

Daishin Securities maintained a 'Buy' rating and a target price of 31,000 KRW for Daeduck Electronics on the 4th.

In the first quarter of this year, Daeduck Electronics recorded sales of 217.7 billion KRW and an operating profit of 10.3 billion KRW, falling short of previous estimates and market expectations. This marks the second consecutive quarter of underperformance against market forecasts. Package sales declined by 28.8% compared to the previous quarter, resulting in a larger-than-expected drop. This is not an issue unique to Daeduck Electronics; the semiconductor downturn has commonly caused performance declines among package companies.

Operating profit for the second quarter is estimated at 13.4 billion KRW, a 29.9% increase from the previous quarter, with sales expected to rise 1% to 219.9 billion KRW during the same period. Samsung Electronics' shipments of DRAM and NAND increased by 13% and 5% respectively compared to the previous quarter, leading to the perception that the second quarter represents the bottom of the market. However, since front-end demand from PCs and mobile phones is not significantly increasing in the second quarter, a full recovery is expected in the third quarter. Going forward, semiconductor packaging is expected to grow centered on Flip Chip Ball Grid Array (FC BGA). Daeduck Electronics' FC BGA sales are projected to increase by 23% this year and 24% next year, driving overall growth.

Park Kang-ho, a researcher at Daishin Securities, analyzed, “Although overall sales fell short of expectations due to weak demand for PCs and smartphones and reduced shipments from semiconductor companies, attention should be paid to FC BGA among semiconductor package companies,” adding, “Growth potential remains valid, so we maintain a view to increase weighting from a mid- to long-term perspective.”