[Click e-Stock] "MDS Tech, Key Domestic Supplier of NVIDIA GPUs"

On November 5, Hanyang Securities analyzed that MDS Tech serves as a key domestic supplier of enterprise-level NVIDIA graphics processing units (GPUs). The firm did not provide an investment opinion or target price.

MDS Tech specializes in embedded development solutions and software solutions. The company was listed on the KOSDAQ market in September 2006. It is a specialized distributor supplying a variety of NVIDIA artificial intelligence (AI) solutions, as well as cloud and software solutions from global big tech companies such as Microsoft Azure and AWS.

Lee Joonseok, an analyst at Hanyang Securities, stated, "The core customers for NVIDIA GPUs are enterprise-level business-to-business (B2B) clients rather than hyperscalers. For ultra-large-scale data center construction projects by companies like Naver and Kakao, NVIDIA is mostly directly involved in sales, so MDS Tech’s main customers are startups, mid-sized companies, and specific business units within large corporations that have actual usage demand."

He added, "This market is characterized by repeated orders in units of several devices, leading to high repeatability relative to its scale. The structure of MDS Tech’s NVIDIA deals is optimized for a B2B, field-oriented market focused on actual usage penetration."

He also noted, "The adoption of NVIDIA GPUs at the enterprise level is expanding rapidly, and sales in the first half of this year also reached an all-time high. Going forward, we believe there is strong potential for continued sales growth in proportion to the expansion of field-based AI adoption."

This year’s estimated sales and operating profit are 178.8 billion won and 9.5 billion won, respectively, representing increases of 3.0% and 59.7% compared to the previous year. He explained, "MDS Tech is clearly repositioning itself as a core infrastructure solution provider in the AI era. With revenue diversification and high growth in NVIDIA GPU distribution sales, the company is expected to achieve record-high sales."