[Click eStock] "Korea Circuit, Semiconductor Package Substrate Storm Growth"

[Asia Economy Reporter Ji Yeon-jin] Daishin Securities announced on the 26th that it maintains a buy investment opinion and a target price of 31,000 KRW for Korea Circuit, expecting high growth from next year as semiconductor package substrate (FC BGA) sales begin in earnest.

Park Kang-ho, a researcher at Daishin Securities, stated, "It is estimated that the proportion of package substrate sales exceeded 50% (51.1%) for the first time in the second quarter on a separate basis this year," adding, "Next year, the proportion of package sales (separate basis), including FC BGA, is estimated to be 62.3%, which is a 20.1 percentage point increase compared to 41.2% last year (estimated 53.2% in 2022), marking a transition to a full-fledged growth industry and enabling further valuation upgrades."

FC BGA is a package substrate mainly applied to communication components, and expansion into home appliances and automotive sectors is expected. In Korea, the FC BGA business is operated only by Samsung Electro-Mechanics, Daeduck Electronics, and Korea Circuit.

Korea Circuit's package sales including FC BGA are expected to reach 454.1 billion KRW this year, surpassing the same period last year by 70.4%, and are projected to achieve 666.3 billion KRW (46.7%) next year. Researcher Park said, "The company's current consolidated price-to-earnings ratio (PER) is 5.6 times, and considering that the proportion of package sales including FC BGA exceeds 50%, it is judged to be undervalued."

The company's separate sales this year are expected to increase by 32% year-on-year to 854.2 billion KRW, and operating profit is projected to rise by 57.6% to 92.8 billion KRW. Next year, sales of 1.07 trillion KRW (a 25.3% increase from this year) and operating profit of 111 billion KRW (19.5%) are anticipated. Researcher Park stated, "Although increased depreciation expenses due to large-scale facility investments this year pose a burden, the expansion of sales reduces fixed cost burdens, and the increase in the proportion of FC series BGA such as FC BGA improves the mix, making operating profit growth possible."

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