[Click eStock] "Simtek, Leading Package Substrate Stock"…Target Price Up

[Asia Economy Reporter Kwon Jae-hee] Hana Financial Investment maintained its 'Buy' rating on Simtek on the 25th and raised the target price to 72,000 KRW.

Simtek achieved sales of 390.1 billion KRW and operating profit of 73.2 billion KRW in the fourth quarter of last year. This represents increases of 40% and 397%, respectively, compared to the same period last year. Sales matched the market forecast of 392 billion KRW, and operating profit exceeded the expected 63 billion KRW by more than 10 billion KRW.

Researcher Kim Rok-ho of Hana Financial Investment evaluated, "Even excluding the one-time gain of about 5 billion KRW from the Japanese subsidiary, the operating profit of 68 billion KRW is a solid performance."

The background of this strong performance is the continued improvement in the product mix due to the overall increase in the proportion of high value-added package substrates. Additionally, the supply shortage of memory package substrates created a favorable pricing environment, which also contributed to the profit.

Simtek is expected to maintain solid performance this year as well. Hana Financial Investment forecasts Simtek's sales this year to be 2.6226 trillion KRW and operating profit to be 300.3 billion KRW, representing increases of 19% and 76%, respectively, compared to the previous year.

Researcher Kim said, "Supply is tight for both memory and non-memory package substrates," adding, "Simtek is currently focusing on capacity expansion, and it is highly likely that sales will continue to expand centered on non-memory package substrates for global customers, sustaining the product mix improvement effect."

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