[Edaily Reporter PARK MIN ] On the 20th, EUGENE INVESTMENT & SECURITIES maintained its “BUY” rating and target price of 110,000 won for FADU INC.(440110), citing strong preliminary third-quarter earnings and continued robust demand for eSSDs. This represents an upside potential of 100.7% compared to the previous trading day’s (October 19) closing price of 54,800 won.

Son In-jun, an analyst at EUGENE INVESTMENT & SECURITIES, stated, “FADU INC.’s preliminary third-quarter results for this year showed revenue of 143.6 billion won and operating profit of 36.3 billion won,” adding, “Operating profit exceeded both our estimate (35.5 billion won) and the consensus estimate (33.6 billion won).”

He continued, “Despite the recent decline in the won/dollar exchange rate, the company posted strong results as module shipments increased significantly,” and explained, “For controllers, while shipments to existing hyperscalers have increased, we estimate that revenue from a third hyperscaler end customer has begun to be reflected.”

By business segment, the module division is estimated to have recorded 63.2 billion won, a 710% increase from the previous quarter, driven by a surge in sales to Taiwanese module houses. Controller sales also showed a robust increase compared to the previous quarter, reaching 77.5 billion won.

Structural benefits resulting from changes in AI server architecture are also taking full effect. Analyst Son explained, “The expansion of the scale-up domain driven by the advancement of interconnects is broadening the scope of application for general-purpose DRAM and eSSDs,” adding, “This structure compensates for accelerator specification adjustments made in response to the severe HBM supply shortage by expanding the adoption of general-purpose DRAM and eSSDs, thereby meeting the demand for KV cache storage.”

He continued, “As eSSD demand rises, NAND manufacturers—FADU INC.’s major direct customers—are actively expanding their long-term agreements (LTAs).” He analyzed, “For FADU INC., which supplies controllers at fixed prices, increased shipments and secured long-term supply volumes are expected to form the foundation for stable earnings growth.”

The outlook for prices and shipment volumes is also positive. Analyst Son stated, “Among memory applications, eSSD is expected to deliver the biggest price surprise relative to market expectations,” adding, “eSSD prices are projected to rise by the mid-20% range in the fourth quarter and are likely to continue their strong upward trend into 2027, driven by stronger-than-expected demand.”

Furthermore, he predicted, “In particular, as FADU INC.’s major customers—North American NAND manufacturers—are actively expanding their LTA contracts to increase their eSSD market share, FADU INC.’s eSSD controller market share is also expected to rise accordingly.”

EUGENE INVESTMENT & SECURITIES projected FADU INC.’s consolidated fourth-quarter earnings at 153.5 billion won in revenue and 31.0 billion won in operating profit. For the full year, the firm estimated that the company would return to profitability in 2026 with revenue of 429.8 billion won and operating profit of 91.2 billion won, and reach revenue of 727.2 billion won and operating profit of 195.3 billion won in 2027.