[Click eStock] "Gaon Chips, Outstanding Growth... New Target Price Set at 150,000 Won"

Expected Outstanding Growth Among Domestic and International Industry Peers
Projected Annual Growth Rate of 100% Until 2026
Proven Technological Competitiveness, Full-Scale Product Mass Production

On the 13th, KB Securities newly issued a buy rating on Gaonchips, expecting significantly superior growth compared to peers in the same industry. The target price is 150,000 KRW. Gaonchips' closing price on the previous trading day was 91,900 KRW.

Researcher Kwon Tae-woo of KB Securities stated, "With the growth of the artificial intelligence (AI) market, demand for AI chip development is expanding not only in fabless (design) but also across various fields including global big tech and AI startups. In this environment, Gaonchips is expected to record an average annual profit growth rate of 98.2% from 2023 to 2026, showing significantly superior growth compared to domestic and international companies."

Gaonchips' projected performance for 2024 includes sales of 108.3 billion KRW and operating profit of 7.9 billion KRW. Along with the surge in AI chip demand, the development proportion related to NPU design, an application-specific integrated circuit (ASIC), is expected to expand. Additionally, with full-scale product mass production approaching, this is expected to lead to external growth. In particular, in 2025, sales of 194.5 billion KRW and operating profit of 20.9 billion KRW are forecasted, driven by the full-scale start of mass production.

Researcher Kwon said, "Through multiple recent contract disclosures, the technological competitiveness has already been proven. Gaonchips was officially selected as the first global design house to win orders for the 2nm process, which is expected to be an important opportunity to highlight its technological competitiveness once again in the global market." He added, "Furthermore, demand from Chinese AI companies concerned about geopolitical risks between the US and China is also increasing, so Gaonchips' position is expected to expand further."

To respond to the rapidly increasing AI demand, Gaonchips is expanding its workforce and investments in tangible assets (servers, space, verification equipment, etc.). The increased investment signifies strengthening relationships with AI partnership customers to meet technical requirements. Researcher Kwon stated, "This is a strategic investment to enhance competitiveness rather than a simple cost," adding, "It is possible to assign a multiple on par with top companies in the global industry."