[Click eStock] "KoAsia Expected to Re-rate with Samsung Electronics DSP"

[Asia Economy Reporter Yoo Hyun-seok] Leading Investment & Securities analyzed on the 23rd that KoAsia is expected to have a stock price re-rating as a DSP (Design Solution Partner) of Samsung Electronics. No investment opinion or target price was presented.

KoAsia was registered as a DSP of Samsung Electronics on the 3rd. This is the design part of the SAFE (Samsung Advanced Foundry Ecosystem), a system semiconductor ecosystem established after Samsung Electronics spun off its foundry division in 2017. Jihoon Shin, a researcher at Leading Investment & Securities, said, "The reason it could be registered as a DSP was because of Nexel, which was acquired last year," adding, "In the past, Samsung Electronics licensed APs developed by Nexel, and Nexel also co-developed Samsung Electronics' AP, Exynos. Such references from Nexel played a major role in the DSP registration."

In particular, Leading Investment & Securities expects KoAsia to secure high competitiveness among Samsung Electronics' DSPs. Currently, a total of 12 companies, including 6 domestic and 6 overseas companies, are registered as DSPs. He evaluated, "Existing domestic companies have only been doing simple services (backend), but Nexel is the only domestic company capable of both design (frontend) and backend," and added, "Through KoAsia Electronics, which is listed in Taiwan, it is even possible to conduct its own sales."

Along with this, it is expected that the stock price could be re-rated in the future due to the DSP status. He said, "TSMC has established an ecosystem called OIP (One Innovation Platform) and names the design part as VCA (Value Chain Aggregator)," adding, "Among them, GUC (Global Unichip Corporation) is key, and TSMC started investing in shares in 2003 and currently holds 34.8%, making it the largest shareholder. The market capitalization rose from about 200 billion KRW at the time of its 2006 listing to about 1.3 trillion KRW now."

He emphasized, "GUC, as TSMC's core VCA, has received a valuation premium with an average price-earnings ratio (PER) of 33.0 times from 2006 to 2019," and added, "KoAsia's valuation is 14.7 times 2020F PER, and I am confident it will be re-rated as it begins its role as Samsung Electronics' DSP."

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