[Edaily Reporter Shin Ha-yeon ] On the 14th, NH INVESTMENT & SECURITIES projected that SIMMTECH Co., Ltd.(222800)’s profitability in the high-density interconnect (HDI) segment would improve significantly starting in the second half of the year, driven by expanded sales of SOCAMM. The firm also cited rising capacity utilization rates and room for production capacity expansion as additional factors supporting an upward revision in earnings. It maintained its “Buy” investment rating and raised the target price from 150,000 won to 170,000 won.

Hwang Ji-hyun, an analyst at NH INVESTMENT & SECURITIES, stated, “The share of SOCAMM sales within module PCBs is expected to expand from approximately 30% in 2026 to around 50% in 2027. Accordingly, the operating profit margin for the HDI segment is projected to rise above its all-time high of 15% to reach the 20% range in the second half of this year.”

She also viewed the potential expansion of SoCam-adopting clients beyond NVIDIA to other companies as a factor that could accelerate profitability improvements. In the first half of the year, the SoCam share stood at 12% in the first quarter and 17% in the second quarter, during which time the HDI division’s operating profit margin rose from approximately 4% to 10%. She projected that the SoCam share would approach 40% in the second half of the year.

Analyst Hwang explained, “As the likelihood of customers adopting small-camera solutions expanding beyond NVIDIA to other companies increases, there is room for the pace of profitability improvement to accelerate.”

He also assessed that the possibility of further upward revisions to earnings estimates remains open. Based on the second quarter, SIMMTECH Co., Ltd.’s company-wide capacity utilization rate was approximately 84%, and since there is still room for further increase, the operating leverage effect is expected to continue. Plans to expand production capacity have not yet been finalized, so they have not been reflected in the current earnings estimates.

Analyst Hwang stated, “We believe that if future expansion plans are finalized, they will serve as a factor for further upward revisions to earnings,” adding, “Since the turnaround in the printed circuit board sector occurred relatively late, the upward trend in earnings is likely to continue for an extended period; accordingly, we expect the stock’s price elasticity to be relatively high within the sector.”

Second-quarter earnings significantly exceeded market expectations. SIMMTECH Co., Ltd.’s second-quarter revenue rose 51.0% year-over-year to 514.7 billion won, while operating profit surged 1,034.5% to 62.9 billion won. The operating profit margin stood at 12.2%. These figures surpassed both NH INVESTMENT & SECURITIES’ previous operating profit estimate of 46.5 billion won and the market consensus of 47.3 billion won.

As the effects of the price hikes implemented at the beginning of the year began to take full effect, the decline in the price of gold—a key raw material—also contributed to improved profitability. SIMMTECH Co., Ltd. provided guidance for the second half of the year of 1.0719 trillion won in revenue and 163.1 billion won in operating profit.

Analyst Hwang explained, “We view this as a conservative forecast that reflects the assumption that the profitability of MSAP substrates will remain consistent from the second quarter through the fourth quarter.”

The firm also significantly raised its earnings forecasts, anticipating that SoCam’s volume and profitability will exceed previous expectations. This year’s revenue forecast was raised by 7.6% from 1.949 trillion won to 2.096 trillion won, while the operating profit forecast was increased by 35.3% from 181 billion won to 245 billion won. The operating profit forecast for next year was also revised upward by 56.2%, from 261 billion won to 408 billion won.

Analyst Hwang emphasized, “In addition to product mix improvements, there are numerous factors that could lead to further upward revisions in earnings estimates,” adding, “Rising capacity utilization rates and room for capacity expansion remain key drivers for further earnings growth, and we expect strong stock price momentum within the sector.”