Research Alarm "MDS Tech, Benefiting from Lee Government's Sovereign AI and NVIDIA's Blackwell GPU Launch... Target Price Up 71%"

[Financial News]  Research Alarm diagnosed on the 14th that MDS Tech has a bright growth outlook due to the large investment momentum secured in the second half of the year from the Lee Jae-myung government's push for the Sovereign AI policy and NVIDIA's Blackwell launch.
Accordingly, the stock price outlook is positive, and the appropriate stock price is suggested at 2,400 KRW, adding a 71.3% increase compared to the current stock price.
Researcher Choi Seong-hwan stated, "As part of the Lee Jae-myung government's strategy to realize 'Sovereign AI', the expansion of GPU supply has been declared, raising interest in domestic AI infrastructure construction companies," and "The company is the exclusive distributor of NVIDIA Jetson series in Korea and an AI server supply partner based on A100, H100, and Blackwell."
He added, "The company is expected to benefit as it is the only company in Korea capable of providing a one-stop solution from server design to installation and technical support, beyond simple distribution," and "If the government directly purchases GPUs or builds public AI centers, the company will inevitably be considered as a primary supply chain partner, so attention is requested."
MDS Tech is a specialized embedded software solution company established in 1998 and listed on KOSDAQ in 2006. Embedded refers to a computer system embedded in electronic devices to perform specific functions. For example, the autonomous driving control unit in a car, the flight controller in a drone, and the motion controller in a robotic arm are all embedded systems.
The company supplies software design tools, simulators, operating systems, middleware, etc., necessary for developing such systems. Major application fields include △Automotive △Defense △Robotics △Medical Devices △Industrial Automation, and recently, it has expanded its business areas to △AI Servers △Edge Computing △Digital Twin.
According to Research Alarm, MDS Tech's other business sectors are diverse, including industrial automation solutions, video analysis systems, shared parking, and electric vehicle charging platforms, but the most notable area recently is undoubtedly the 'NVIDIA AI Platform'. The company is the exclusive distributor of NVIDIA Jetson (NVIDIA's 'Edge AI' dedicated small computer module) series in Korea and an official partner for supplying AI servers based on high-performance GPUs like A100, H100, and Blackwell, possessing engineering capabilities at a unique level in Korea, providing integrated services from server design, system construction, to technical support.
In 2024, NVIDIA-related sales grew by 300% compared to 2020. As the demand for NVIDIA products used in IT servers and supercomputers increased, last year's NVIDIA-related sales accounted for about 20% of total sales.
Researcher Choi stated, "With the global launch of the next-generation GPU 'Blackwell' in the second half of the year and the government's 'Sovereign AI' policy, a large-scale expansion of GPU demand is expected, accelerating growth," and "Considering not only the growth of the AI market but also the benefits of public sector GPU infrastructure investment, other business sectors need to be re-evaluated as strategic new business sectors driving future growth, rather than just ancillary areas."
In addition, MDS Tech is establishing itself as a key partner in the domestic automotive industry preparing for the era of autonomous driving and SDV. In particular, it is the exclusive distributor outside the group for Hyundai Motor Group's vehicle OS platform 'Mobilgene', providing integrated solutions beyond simple license distribution, including education, technical support, and development environment construction.
Meanwhile, Research Alarm estimated the company's 2025 operating performance based on IFRS consolidated standards, with sales of 216.9 billion KRW (+31.0%, YoY) and operating profit of 10.2 billion KRW (+72.9%, YoY). Researcher Choi added, "The background of performance improvement is expected to include high growth in other business units due to the expansion of AI server and GPU demand, increased demand for automotive software solutions due to SDV transition, and expansion of IoT device management and digital transformation solutions supply," and "In addition, the reflection of the consolidated performance of the subsidiary Alphanox and the stabilization of profitability in the healthcare sector are also expected."




kakim@fnnews.com Kyung-ah Kim Reporter