Daishin Securities Co. said on the 26th that SIMMTECH is set to enter a full-fledged growth phase as SoC/SiP sales ramp up next year. It maintained a "Buy" rating and raised its target price to 60,000 won from 31,000 won. SIMMTECH closed at 52,400 won the previous day.
Park Kang-ho, an analyst at Daishin Securities Co., said, "Starting in the second quarter of next year, revenue related to Nvidia SoC/SiP is expected to begin at about 90 billion to 100 billion won," adding, "Mass production is underway for Samsung Electronics, SK hynix and Micron, and we expect a higher market share than competitors."
Profitability is also expected to improve significantly thanks to a memory boom next year and a better mix. After direct investment related to artificial intelligence (AI) in semiconductors, replacement investment is underway for general servers and data centers, while the transition of DRAM to DDR5 is accelerating. Park assessed that sales of high value-added products such as server-focused memory modules (GDDR7), enterprise SSD modules, and FC CSP used in buffer chips will also increase.
Park said, "Based on next year's earnings per share (EPS), SIMMTECH's price-earnings ratio (PER) is 19.7 times and its price-book ratio (PBR) is 3.8 times, similar to past growth phases," adding, "Compared with the timing of the profitability turnaround, the valuation is attractive." He estimated next year's operating margin at 7.3%.