[Click eStock] "Simtek, Expected to Return to Profit This Year... Target Price ↓"

Kiwoom Securities analyzed on the 17th that Simtek is expected to turn its operating profit positive this year. The investment opinion was maintained as 'Buy,' but the target price was lowered to 23,000 KRW.

Kiwoom Securities forecasted that Simtek would record sales of 278.5 billion KRW and an operating loss of 38.7 billion KRW in the fourth quarter of last year. Sales decreased by 6% compared to the same period last year, with continued operating losses.

Kim Sowon, a researcher at Kiwoom Securities, said, "Due to a decline in operating rate and deterioration of product mix, the operating loss is expected to widen," adding, "This is because the impact of inventory adjustments by customers due to weak set demand continues, and new orders have decreased."

However, the performance this year is expected to show a pattern of a weak first half and a strong second half. He explained, "Operating losses are expected until the first half of this year due to the impact of customer inventory adjustments," and "The rebound in smartphone and IT set demand driven by China's subsidy policy is expected to lead to the depletion of customer memory inventory and accelerate Simtek's performance improvement."

He emphasized, "Currently, demand for server-oriented products remains relatively solid, and a rebound in PC demand is also expected in the second half," adding, "The response to new products such as CXL, GDDR7, and system IC substrates, as well as the diversification of application areas and customers, are expected to begin showing results starting this year."