Korea Circuit shares have surged over 13% amid expectations of improved performance driven by increased sales of its new memory module, SoCAMM. Analysts have raised their third-quarter earnings estimates, predicting continued growth in key business segments next year, which has boosted investor sentiment.
According to the Korea Exchange, as of 1:53 PM, Korea Circuit's stock was trading at 72,900 won, up 8,400 won (13.02%) from the previous trading day.
On this day, Meritz Securities projected Korea Circuit's standalone third-quarter revenue and operating profit at 301.4 billion won and 19.6 billion won, respectively. These figures represent increases of 32.4% and 60.6% compared to the same period last year. Compared to previous estimates, revenue has been revised up by 2.7%, and operating profit by 11.5%. The consolidated operating profit, which includes results from subsidiaries, is expected to exceed the market consensus of 17.2 billion won by 3.2%.
The key factor driving the earnings outlook is the expansion of sales for memory modules centered around SoCAMM. Yang Seung-soo, a researcher at Meritz Securities, noted in a report that "SoCAMM began generating significant sales from mass production in July, and monthly sales figures are continuously increasing."
The trend of increased supply is expected to continue into the fourth quarter. Yang stated, "In the fourth quarter, a supply increase of about 50% compared to the third quarter is anticipated, and by 2027, growth is expected to accelerate further with the addition of new customers."
Next year, improvements in profitability from the package substrate business, in addition to memory modules, are also seen as positive factors. Yang added, "The effects of memory module expansions will begin to be reflected in the fourth quarter, with full operation of the expanded facilities expected in the first quarter of 2027. In the package substrate sector, price increases for major clients and a higher proportion of high-value products are expected to contribute to improved performance."
* This article has been translated by AI.
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