[Click eStock] "DDR5 4-Year Cycle Beginning"... Abico Electronics Target Price Up

[Asia Economy Reporter Ji Yeon-jin] Shinhan Financial Investment announced on the 6th that it maintains a buy rating on Abico Electronics, expecting a performance leap driven by securing growth momentum over the next four years with DDR5, the next-generation memory semiconductor, and an increase in market share of mobile power inductors next year, raising the target price to 140,000 KRW. The target price was calculated by applying the price-earnings ratio (PER) of 14.7 times at the end of 2017, a boom period for passive components, to next year's earnings per share (EPS).

Abico Electronics has not yet started supplying metal power inductors adopted from DDR5, but shipments are expected from mid-next year. The adoption rate of DDR5 is expected to increase over 3 to 4 years, and the related metal power inductor market size is estimated at 210 billion KRW. Hyungwoo Park, senior researcher at Shinhan Financial Investment, said, "Abico Electronics can achieve 68% sales growth based on its core business if it supplies with a 25% market share in the future," adding, "Profitability will also increase significantly."

The company's operating profit is expected to surge from 3.7 billion KRW this year to 14.2 billion KRW next year and 20 billion KRW in 2023. DDR5 is a mid- to long-term growth driver, and from next year, sales of high-spec mobile power inductors are expected to more than double. Researcher Park Yeon-kwon explained, "High-spec mobile power inductors are core growth drivers of the company along with DDR5 metal power inductors," adding, "Generally, the operating profit margin of high value-added inductors is 2 to 4 times higher than that of existing products."

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