한국투자증권 has projected that Doosan Testa's third-quarter performance will fall short of market expectations, but anticipates that this will mark a low point from which performance improvements will begin. The firm maintains its 'Buy' rating and has set a target price of 157,000 won for the company.
Nam Chae-min, a researcher at Korea Investment Securities, estimates that Doosan Testa's third-quarter revenue will reach 73.6 billion won, representing a decline of 11.5% year-on-year and 9.0% quarter-on-quarter. Operating profit is expected to be 4.7 billion won, down 11.6% from the same period last year and 52.5% from the previous quarter, with an anticipated operating margin of 6.4%.
These figures are 11.9% lower than market consensus for revenue and 4.1 percentage points below the expected operating margin. The reduction in ADAS production in the second quarter has led to an inevitable decrease in related volumes for the second half of the year, while the mobile sector is also entering a seasonal downturn, resulting in lower utilization rates for mobile application processors (AP) and image sensors (CIS). However, the memory controller segment is expected to continue its growth trend, with production volumes in the second quarter more than doubling compared to the previous quarter.
A rebound in performance is anticipated to begin in the fourth quarter, driven by a recovery in mobile demand, the start of mass production for the Grok3 LPU, and an increase in testing volumes for mobile APs due to the expanded lineup of Exynos 2700. Testing operations for the Grok3 LPU are set to commence in November.
Korea Investment Securities views 2027 as a pivotal year for Doosan Testa's performance. Revenue is projected to reach 497.2 billion won, a 49.2% increase from this year, while operating profit is expected to surge by 220.0% to 108.6 billion won. The operating margin is also forecasted to rise to 21.8%.
The mass production of Apple CIS is expected to begin reflecting in results from the second quarter of next year. Analysts suggest that Doosan Testa is likely to secure contracts for AI5, which is scheduled for mass production in the second half of next year, following its current testing responsibilities for Tesla's AI4.
Nam noted that AI5 is estimated to be a high-performance chip targeting applications such as Optimus, RoboTaxi, and data centers, with performance levels 5 to 10 times higher than the dual system of AI4. Rather than replacing AI4, it is more likely that both will be utilized in different areas, potentially leading to additional revenue growth from AI5 contracts.
Korea Investment Securities continues to regard Doosan Testa as a top pick in the non-memory OSAT sector. Despite a more than 40% decline in stock price from its peak, the firm believes that the third quarter will serve as a low point, with performance expected to trend upward and a high likelihood of additional AI5 contracts.
Nam stated, "Now is the time to pay renewed attention to Doosan Testa. If Samsung Foundry secures stable yields in the 2-nanometer process, its appeal as an alternative to TSMC could become more pronounced, increasing the likelihood of higher volumes for Samsung Foundry and benefiting Doosan Testa."
* This article has been translated by AI.
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