[Click eStock] "Daeduck Electronics, One-Time Expense Headwind Over... Rebound Signal"

[Asia Economy Reporter Park Jihwan] DB Financial Investment maintained its investment opinion of 'Buy' and a target price of 14,000 KRW for Daeduck Electronics on the 4th, stating that the year 2019, marked by one-time expenses, is over and this year marks a period of bounce back.

Researcher Kwon Seongryul of DB Financial Investment analyzed, "Last year's annual sales were 1.0709 trillion KRW and operating profit was 47.4 billion KRW, with operating profit falling far short of expectations, but this should be considered in light of one-time expenses exceeding 20 billion KRW, such as stock compensation costs and HDI restructuring costs."

Considering this, he evaluated that the core Package Substrate segment showed sufficient potential with sales exceeding 500 billion KRW and an operating profit margin above 10%.

In the first quarter of this year, a decline in demand due to the COVID-19 crisis and some changes in clients are expected to reduce performance. Sales are projected at 251.6 billion KRW and operating profit at 8.9 billion KRW, representing decreases of 0.5% and 2.2% respectively compared to the previous year.

However, from the second quarter, performance improvement centered on Package Substrate is expected to accelerate as the impact of COVID-19 diminishes. It is explained that quantitative and qualitative growth is anticipated due to increased bit growth from memory companies and a higher proportion of high-value-added package products such as LPDDR5 and GDDR6.

Researcher Kwon Seongryul forecasted, "By restructuring HDI and AVN-use MLB, which had accumulated losses, profitability improvement will also be possible from the second half of the year."

There is also promising news regarding changes after the corporate split. Daeduck Electronics will undergo a spin-off on May 1. Researcher Kwon stated, "It will be an opportunity to clearly distinguish the management company and the business company, allowing a stronger focus on the core PCB business."

This content was produced with the assistance of AI translation services.