[Click eStock] "ADTechnology: Core Business Recovery Confirmed... Growth Expected"

On September 9, Korea Investment & Securities analyzed that ADTechnology is expected to grow in the future, as its performance has recovered in the first half of the year. The company did not provide an investment opinion or a target price.

In the second quarter, ADTechnology recorded sales of 34 billion KRW and an operating loss of 1 billion KRW. Compared to the same period last year, sales increased by 68%, while the company continued to post losses. Soo-Hyun Cho, a researcher at Korea Investment & Securities, stated, "It is unfortunate that operating losses continued, but it is positive that the core business turned profitable on a separate basis and that the company consistently secured development projects despite the sluggish market conditions."

He added, "The value of new orders in the first half of this year has already reached 70% of the average for the past three years, and as of September, it has surpassed 130%. If the first-half results signaled a recovery in the core business, the company is expected to enter a full-fledged growth phase starting in the second half."

Korea Investment & Securities forecasts that ADTechnology will record consolidated sales of 183.5 billion KRW and an operating loss of 3.9 billion KRW this year. He emphasized, "In the third quarter, consolidated sales are expected to reach 57.3 billion KRW, showing remarkable growth among domestic DSP companies. Next year, growth will accelerate through mass production of 4nm artificial intelligence (AI) chips for Company S in Korea and 14nm communication chips for Company Z."

Based on this, the company is projected to achieve consolidated sales of 289.3 billion KRW and operating profit of 4.2 billion KRW in 2026. Compared to the previous year, sales will increase by 57.6%, and the company will turn profitable in terms of operating profit.

He said, "Whether the company secures the 4nm development project order from Company V in the Americas within this year will be a key event. If successful, it will mark the second-largest development project order among domestic design houses."