[Edaily Reporter Kwon Oh Seok ] NH INVESTMENT & SECURITIES announced on the 25th that it is maintaining its “Buy” rating on SIMMTECH Co., Ltd.(222800)and raising its target price from 120,000 won to 150,000 won.

Hwang Ji-hyun, an analyst at NH INVESTMENT & SECURITIES, stated, “We assess that production volumes of SOCAMM2-related substrates are increasing steadily, and we expect the resulting product mix improvement to gain momentum.” She added, “As orders for low-margin tenting products decline, we anticipate that their share of total revenue will shrink starting in the third quarter. Mass production of high-margin PCBs for LPDDR6 is also expected to begin in earnest starting in 2027,” she analyzed.
He added, “The primary rationale for raising the target price is the upward revision of earnings estimates to reflect the resulting product mix improvement,” noting, “In its outlook report for the second half of the year, the company stated that further upward revisions to earnings estimates for substrate manufacturers would be possible through △capacity expansion, △product mix improvement, and △price increases.”
Analyst Hwang stated, “The effects of recent price hikes across the semiconductor substrate sector are expected to be reflected starting in the second quarter, and the benefits of product mix improvement are projected to become visible in the second half of the year as SOCAMM2 mass production gains momentum,” and “Regarding capacity expansion, the company plans to execute only maintenance-level CAPEX (capital expenditures) this year; however, if demand for SOCAMM modules grows faster than expected, it will be able to expand production capacity by utilizing idle space at its non-memory substrate facility in Cheongju,” he assessed.
For the second quarter, the company forecast revenue of 472.8 billion won (up 38.7% year-over-year) and operating profit of 46.5 billion won (up 738.5%), exceeding the market consensus of 43.4 billion won in operating profit. He added, “This is because the effect of price increases implemented at the beginning of the year to offset rising raw material costs has been fully reflected,” and noted, “As orders for low-margin tenting products are declining and prices for key raw materials, such as gold, continue to fall, we expect the trend of improved profitability to continue throughout the year.”