[Click eStock] "Daeduck Electronics Benefits from Semiconductor Package Substrate Boom... Target Price Up"

[Asia Economy Reporter Song Hwajeong] On the 19th, SK Securities evaluated Daeduck Electronics as a leading company that benefits strongly and for a long period during the semiconductor substrate boom phase, and raised the target stock price from the previous 21,000 KRW to 27,000 KRW. The investment opinion was maintained as 'Buy.'

Lee Dongju, a researcher at SK Securities, said, "We raised the operating profit estimate for next year by 25% due to the improvement in the size and profitability contribution of package substrates, and based on this, we also raised the target stock price," adding, "There is sufficient room for additional price increases, and if the structural improvement of modules and multi-layer printed circuit boards (MLB) accelerates, there is potential for further performance upgrades."

A strong supplier-dominant market continues due to the shortage of semiconductor package substrates. Supply and demand are expected to stabilize by 2023. In this situation, Daeduck Electronics started operating the newly expanded Flip Chip Ball Grid Array (FC-BGA) from the third quarter of this year, and it is scheduled to be fully operational in the first quarter of next year, which is expected to be fully reflected during the boom phase next year. The researcher analyzed, "The additional possible scale from the FC-BGA new expansion operation next year is over 150 billion KRW," and "Due to the continued supply shortage until 2023, additional price increases are also possible."

The camera module FPCB business environment is unfavorable, and there is an opinion that the possibility of future business withdrawal should also be considered. Structural improvement toward semiconductors is expected through the establishment of new production lines such as package substrates for DRAM. The researcher said, "There is a high possibility that non-core business sectors will be further reduced," and "The business structure will focus on package substrates and high value-added products, and the margin level is expected to gradually rise in the future."

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