[Click eStock] "Samhwa Electric, Beneficiary of AI-Driven Data Center Market Expansion"

Shinhan Investment Corp. analyzed on the 14th that Samhwa Electric is the biggest beneficiary of the expansion of the AI-driven data center market. No investment opinion or target price was provided.

Samhwa Electric recorded sales of 58.3 billion KRW and operating profit of 7.7 billion KRW in the first quarter. This represents increases of 7.3% and 123.8%, respectively, compared to the same period last year. Researcher Lee Byung-hwa said, "Operating profit increased significantly compared to the same period last year," adding, "This is due to the sales growth of S-Cap and the favorable raw material price effects."

He also forecasted strong performance in the second quarter. He explained, "S-Cap is expected to recognize most of its production capacity as sales in the second quarter following the first quarter," and added, "With the rising penetration rate of SSDs in data centers and the expansion of customers applying S-Cap, preparations are underway to increase production capacity (Capa) by more than 30%."

He emphasized, "The price of aluminum foil continues to maintain a downward trend compared to the previous quarter," and "Existing product lines are improving performance mainly in the premium home appliance sector."

He stated, "Compared to domestic and foreign competitors, S-Cap's competitive advantage has entered a phase leading to customer diversification and increased capital expenditures (CapEx)," and concluded, "It is the biggest beneficiary of the AI-driven data center market expansion, making continued performance improvement possible."