Kyobo Securities reported on July 10 that Daeduck Electronics is expected to see continued performance improvement through 2027, driven by strong demand across all substrate business divisions. As a result, the firm raised its target price from 160,000 won to 180,000 won, an increase of 12.5%, while maintaining a 'buy' rating.
Park Hee-cheol, a researcher at Kyobo Securities, noted that although the recent stock price has adjusted by about 40% due to concerns over artificial intelligence (AI) equipment investment, the fundamentals of the company are actually strengthening. He stated, 'Contrary to industry concerns, there is a historic boom in demand across all substrate items being supplied from a corporate perspective.'
He highlighted that the flip-chip ball grid array (FC-BGA) substrates are seeing significant increases in volume not only in traditional areas like automotive and controllers but also in networks and optical modules. Additionally, the flip-chip chip scale package (FC-CSP) continues to expand sales due to sustained strong demand.
Memory substrates are also responding to high-value products such as low-power DRAM (LPDDR) and graphics DRAM (GDDR), with demand reaching full capacity levels. Park assessed that 'based on strong demand, the overall margin rate is also on a trend of further improvement, indicating a clear expectation of strong performance.'
He added, 'The FC-BGA business is expected to see meaningful profit margin improvements in double digits this year as new application volumes continue to expand. Similar to top industry players, there are also proposals for advance payments to secure long-term supply contracts and expansion volumes.'
For the second quarter of this year, Daeduck Electronics is estimated to achieve consolidated sales of 382.5 billion won and an operating profit of 68 billion won, marking increases of 55.6% and 2,241.8%, respectively, compared to the same period last year. For 2026, sales are projected to reach 1.572 trillion won, with an operating profit of 274 billion won.
* This article has been translated by AI.
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