[Click eStock] "DKT, Expected Benefits from On-Device AI... Undervalued Appeal Highlighted"

Kiwoom Securities analyzed on the 12th that DKTI will begin to fully benefit from the growth of the on-device AI market.

DKTI's main products are FPCA (Flexible Printed Circuit Assembly) for smartphones and automotive modules, with smartphone FPCA used in OLED panels accounting for more than 50% of sales. Other products include PCM (Protection Circuit Module), a battery operation protection circuit device, and wireless chargers for vehicles.

With the recent rapid increase in demand for smartphones equipped with AI functions, the sales volume of flagship smartphones featuring DKTI's products is also expected to expand.

Hyunjin Oh, a researcher at Kiwoom Securities, explained, “Especially, the Galaxy S25 model, upgraded with AI functions by adopting the Snapdragon 8 Elite, is expected to achieve record-breaking sales with 1.3 million units sold in domestic pre-orders. DKTI maintains a leading position in flagship models of major domestic customers based not only on SMT (Surface Mount Technology) competitiveness but also on cost competitiveness through its parent company BH.”

Smartphones with AI technology require an increase in mounted components and higher mounting difficulty, so an increase in the average selling price (ASP) of DKTI's FPCA products is also anticipated. Additionally, on-device AI products require advanced battery technology to maximize power efficiency. Accordingly, DKTI's S-PCM, which complements the protection circuit PCM, is gaining attention.

Researcher Oh stated, “S-PCM is a miniaturized product compared to the existing one, with higher battery energy efficiency and advantages in heat resistance. It is expected to be installed in flagship models this year, with plans to expand its application to other models in the future.”

DKTI's new business performance is also drawing attention. In addition to smartphones, the company is expanding its product lineup to IT OLED, with sales expected to begin in the second half of this year. Furthermore, DKTI is supplying ESS BMS (Battery Management System) modules to domestic battery cell customers. As domestic battery companies are increasing the export ratio of ESS batteries compared to EV batteries as of 2024, DKTI's sales growth is also expected accordingly.

Researcher Oh analyzed, “With the blooming of the on-device AI market, the growth of the existing smartphone division combined with new business achievements is expected to result in DKTI's 2025 performance of KRW 494.9 billion in sales (a 23% increase year-on-year) and operating profit of KRW 30.7 billion (a 33% increase year-on-year).”

He added, “Currently, DKTI's stock price is at a price-to-earnings ratio (PER) of 5.7 times based on 2025, indicating a significantly undervalued phase.”