A PCB (printed circuit board) manufacturer, Korea Circuit (KRX: 007810), saw its stock price jump by 22% on the afternoon of the 14th, fueled by strong expectations for a profit reversal after 10 quarters of losses. The company's stock rose to 12,890 KRW, reflecting growing optimism following its anticipated supply expansion to Broadcom.

Daishin Securities has upgraded Korea Circuit's rating to Buy and increased its target price to 16,800 KRW, citing a reduction in fixed costs and increased revenue from Broadcom supply. The brokerage firm forecasts a profit turnaround starting in the first quarter of 2025.

Analyst Park Kang-ho from Daishin Securities predicts that Korea Circuit will report operating profit of 9.1 billion KRW (14.5 billion KRW consolidated) in the first quarter of 2025, marking its first profit after ten quarters of losses. He further estimates that the company will see a significant increase in operating profits throughout the year, projecting annual operating profit of 36.4 billion KRW (67.1 billion KRW consolidated) in 2025, a turnaround from the previous year's losses.

According to Park, the key drivers of profitability improvement include a reduction in fixed costs, particularly depreciation, and the planned increase in production for semiconductor PCBs. With Korea Circuit's new semiconductor PCB plants set to begin operations, a substantial cost base of around 1.1 trillion KRW will be incurred in the fourth quarter of 2024, positioning the company for growth in 2025.

Park further explains that the combination of declining fixed costs and increasing orders for flip-chip ball grid arrays (FC-BGA) is expected to significantly raise the company's utilization rate, leading to substantial revenue growth in 2025. With new facilities producing FC-BGA chips for semiconductor clients like Broadcom, Korea Circuit is set to capitalize on increasing demand, with estimated quarterly sales of over 20 billion KRW in the last quarter of 2024.

Korea Circuit is the pioneer of the Korean PCB industry. It has seen the development of Korea’s electronics industry as an expert in the production of PCB for the past 52 years. Armed with state-of-the-art technology, it has developed world-class PCBs, and its applications range from home appliances including digital TVs and PCs to mobile devices like mobile phones and PDAs and memory, as the key to the IT industry. With customer satisfaction as its top priority, it has made untiring efforts to innovate and change in order to become a company that is trusted by customers by producing the best quality products.

Korea Circuit's bright outlook has investors anticipating that the company will not only recover but also achieve long-term growth driven by increased demand for its semiconductor packaging products.