Hana Securities on the 15th said Daeduck Electronics is seeing the effects of mix improvement centered on high-margin products and price hikes across all products take hold. It maintained its investment rating at "buy (BUY)" and raised its target price to 250,000 won from 170,000 won. The previous session's closing price was 165,200 won.
Hana Securities projected Daeduck Electronics' second-quarter sales this year at 372.6 billion won and operating profit at 62.4 billion won, up 52% and 3,236% year over year, respectively. Hana Securities also raised its full-year sales and operating profit estimates by 3% and 6% from its prior forecasts.
The reason, it said, is that the supplier-favorable market is persisting amid worsening shortages of package substrates and multilayer boards (MLB), accelerating mix improvement centered on high value-added products.
Kim Min-gyeong, an analyst at Hana Securities, said, "Flip-chip scale package (FCCSP) appears to have the largest price hikes across all product lines, as mix improvement from spec upgrades is reflected on the back of strong demand for automotive semiconductors such as radar sensors and advanced driver-assistance systems (ADAS)," and added, "Memory package substrates, flip-chip ball grid array (FCBGA), and MLB also saw price increases reflecting higher materials costs."
Kim said there is ample room for further profitability improvement through additional price increases stemming from deepening supply shortages and Production yield gains.
Kim explained, "As the supplier-favorable environment for package substrates strengthens, profitability improvement from price hikes is accelerating," and said, "With large-scale capacity expansions securing medium- to long-term growth visibility and upfront payments from customers, downside risks are being reduced."