Stunning Value: "KORCHIP's profit jumped ninefold as sales doubled... Reassessed as an AI power backup stock"

[Financial News] KORCHIP, a KOSDAQ-listed company, has entered a profitability leverage phase as its earnings are rising much faster than its top line, according to an analysis. The company is also being viewed as expanding beyond small electronic components into a power backup solutions provider targeting smart meters, AI data centers and industrial automation.
Jeong Geum-yeol, a researcher at Stunning Value Research, said on the 1st, "What matters about KORCHIP is not simply sales growth, but the fact that revenue growth is quickly flowing through to operating profit." He added, "As improved production efficiency and a lighter fixed-cost burden come together, operating leverage is now kicking in in earnest."
KORCHIP's sales in the second quarter of this year came to 18 billion won, up 109.3% from a year earlier. Operating profit surged 824.5% to 4.4 billion won, while the operating profit margin rose 19.0 percentage points to 24.5%. In other words, operating profit increased more than ninefold while sales merely doubled.
The change in earnings strength stands out even more when compared with last year's full-year operating profit of just 1.1 billion won. For the first half of this year, cumulative sales reached about 30.1 billion won and operating profit about 5.5 billion won, already five times last year's full-year operating profit.
The next growth driver is broader application areas. Jeong said, "KORCHIP is expanding its flagship supercapacitors from memory backup uses into smart meters, solar inverters and industrial equipment." He added, "As investment in AI servers and data centers expands, demand for stable power supply and instantaneous backup power is also rising, which is seen as a medium- to long-term growth factor."
The company also has a global customer base. In the first half of this year, exports accounted for 37.8% of sales, and it counts Amazon.com, Inc., Keyence Corporation and Huawei among its customers. If orders from global clients continue to grow and the share of high-value-added products rises, the company could deliver profit improvement beyond simple top-line growth, the analysis said.
However, it still needs to be confirmed whether the 24.5% operating margin reached in the second quarter can be sustained. Jeong pointed to several key variables ahead, including maintaining the operating margin, increasing orders from global customers, expanding new demand in AI and industrial uses, and raising the share of high-value-added products.
Jeong added, "The investment point is no longer whether sales will grow, but how long the current profit growth can continue." He said, "If the sustainability of the earnings improvement is confirmed, the company could be revalued as a power backup solutions provider for the AI, smart infrastructure and industrial automation era."

[email protected] Kim Kyung-a Reporter