[Theme Stocks] MK Electronics, strengthened due to increased demand for AI server memory... Securities industry raises target price to 40k won

MK Electronics performed strongly in the first quarter with better-than-expected results in the securities sector outlook. Analysis suggests this is due to increased lead bonding demand driven by expanding AI server memory requirements, as well as robust demand from Chinese subsidiaries boosting earnings improvement expectations.

As of the 23rd, MK Electronics’ stock price traded above the level of the previous trading day.

Hyundai Motor Securities issued a forecast for MK Electronics on the same day, believing that its first-quarter performance will significantly exceed market expectations, and maintained a “Buy” investment opinion. The target stock price was raised by 86% from the original 21,500 won to 40,000 won.

Hyundai Motor Securities analyst Kim Jong-pyeong analyzed that, as AI server memory demand expands, lead bonding demand shows strong growth, and demand from Chinese subsidiaries also outperforms that in South Korea. Based on this assessment, earnings improvement is fully underway.

The securities industry predicts, based on consolidated reports, that first-quarter sales will reach 4.724 trillion won, a year-on-year increase of 67%; operating profit is expected to be 245 billion won, turning losses into profits. Semiconductor division profits are also expected to exceed previous estimates by about 33%.

Previously, MK Electronics’ full-year 2024 sales were 14.042 trillion won, up 19.9% year-on-year, but operating profit was 24.5B won, a decrease of 74%. However, net profit for the period was 1.4T won, turning losses into profits. The market is focused on the possibility that, driven by expanding demand for AI servers and high-performance semiconductors, its semiconductor division’s sales in 2025 could surpass 1 trillion won.