On the 28th in the morning, ADTechnology shares were up more than 15%. Analysts said the company is expected to keep its earnings growth after switching from TSMC's Value Chain Alliance (VCA) to Samsung Electronics' design solution partner (DSP).
ADTechnology is a corporations specializing in logic semiconductor design and mass-production services. It had generated sales in the past as an official partner of Taiwan's TSMC, but in 2020 it registered as an official design solution partner (DSP) of Samsung Electronics' foundry and shifted its business structure.
At 11:55 a.m. that day, ADTechnology was trading on the KOSDAQ market at 27,750 won, up 3,700 won (15.38%) from the previous session.
Cho Su-heon, an analyst at Korea Investment & Securities, said in a report that day, "The company once again emphasized that the reason for switching from TSMC's VCA to Samsung Electronics' DSP was a strategic choice to secure overseas clients," and added, "After the switch, it conducted aggressive sales not only to domestic fabless companies but also in the United States, Europe and China, securing many new overseas clients."
Cho estimated ADTechnology's overseas sales this year at 24 billion won, up 276% from a year earlier. In particular, with a high likelihood of new orders in the Americas in the fourth quarter, Cho judged that the share of overseas sales will expand further.
At the same time, Cho projected consolidated sales this year of 157.7 billion won and operating profit of 1.2 billion won. Sales would rise 48% from a year earlier, and operating profit would turn to the black.
Meanwhile, ADTechnology posted consolidated third-quarter sales of 36.8 billion won and operating profit of 2.668 billion won this year. Sales increased 6.9% from the same period a year earlier, and operating profit returned to the black.
High-margin artificial intelligence (AI) and high-performance computing (HPC) revenue was recognized in concentration, and operating leverage occurred as investments in servers and electronic design automation (EDA) tools, which are fixed-cost in nature, were completed.
Heo Seong-gyu, an analyst at Shinhan Investment & Securities, said in a report that day, "Starting with the third-quarter turnaround to profit, strong results are expected to continue in the fourth quarter," adding, "As development sales increase and mass production begins, we judge the company is undervalued compared with peers," and set a target price of 33,000 won.