[Click eStock] "Simtek, Turns Profitable in Q2 This Year... Target Price Up"

Daishin Securities forecasted on the 24th that Simtek's performance recovery will begin from the first half of this year and raised the target stock price by 21.7%, from the previous 23,000 KRW to 28,000 KRW. The investment rating was maintained at 'Buy.'

Park Kang-ho, a researcher at Daishin Securities, stated, "Simtek's operating profit for the first quarter of 2025 is expected to remain in deficit at -16.7 billion KRW, but it will be better than the market consensus (-25.7 billion KRW). Inventory adjustments by memory customers were completed faster than expected, and the operation rate in the memory industry improved due to the effect of China's Yiguhuanxin, leading to expectations of performance recovery," he analyzed.

In particular, memory companies such as Samsung Electronics and SK Hynix are proactively transitioning to DDR5, and the increase in DDR5 production beyond plans is expected to act as a positive factor. Although it is difficult to consider this as the beginning of a full-scale memory market rebound, a gradual recovery is expected starting from the first quarter of this year.

Simtek's operating profit for the second quarter of this year is expected to turn positive to 1.8 billion KRW compared to the previous quarter. Researcher Park said, "With increased sales in the memory module and package sectors, the first quarter's performance has passed the bottom phase," and evaluated, "Since Simtek has a high proportion of memory, it is expected to be the biggest beneficiary of the increased operation rates of memory companies." He added, "If memory demand fully recovers in the future, the speed of sales and operating profit improvement (leverage effect) will be higher compared to competitors."

Annual performance is also expected to rebound starting this year. Although Simtek recorded losses consecutively in 2023 and 2024, operating profit is forecasted to turn positive at 29.2 billion KRW this year. In 2026, operating profit is estimated to increase by 328% year-on-year to 124.8 billion KRW. Researcher Park analyzed, "In the second half of this year, sales of high value-added products in non-memory sectors such as FCCSP and SiP are expected to increase, leading to additional profit improvement," and "As the customer base in the non-memory sector diversifies, profitability is expected to improve compared to last year."