"Daeduck Electronics: Growth to Reaccelerate Next Year as Capacity Expansions Take Effect; Expansion of High-Margin Products"

[Financial News] Daol Investment & Securities forecast that Daeduck Electronics’ growth would be constrained in the short term by capacity limits, but that top-line growth would accelerate again as the effects of capacity expansions begin to be reflected from next year. It maintained its “Buy” rating and target price of 230,000 won.
Kim Yeon-mi, an analyst at Daol Investment & Securities, said on the 7th, “Daeduck Electronics is expected to post third-quarter revenue of 420.2 billion won and operating profit of 75.3 billion won, up 46.8% and 207.8%, respectively, from a year earlier.” The operating margin was forecast at 17.9%.
With high utilization rates continuing across all product lines, the company has limited capacity to accommodate additional orders. However, capacity expansions in FC-BGA and FC-CSP are expected to drive renewed top-line growth next year. The additional FC-BGA capacity is expected to contribute to revenue from the second quarter next year, and the FC-CSP capacity from the third quarter.
In particular, large-area FC-BGA for networking entered mass production late last month, and requests are also coming in to develop products for physical AI image servers. The analysis said profitability is also expected to improve as the product mix shifts toward high-margin products and utilization of new capacity rises.
Kim said, “With major substrate makers’ new capacity expansions limited, Daeduck Electronics has secured supply capacity ahead of time, and its top-line growth is expected to reaccelerate next year.” She added, “It is also worth watching for greater earnings leverage as the product mix shifts toward high-margin products.”
[email protected] Im Sang-hyeok Reporter