[Click e-Stock] "Humanoid Robot Supply Chain Restructuring... DKT, a Key Beneficiary of China Decoupling"

IBK Investment & Securities Sets New Target Price at 25,000 Won

On September 8, IBK Investment & Securities initiated coverage on DKT with a 'Buy' recommendation and set a new target price of 25,000 won. This suggests a potential upside of 48.8% compared to the closing price of 16,800 won on the 4th. The rationale is that DKT is expected to emerge as a key beneficiary as the supply chain for humanoid robots, which has been dependent on China, undergoes restructuring.

DKT is a company that manufactures modules (FPCA) by assembling electronic components onto flexible printed circuit boards (FPCB). Unlike most circuit board manufacturers who outsource component assembly, DKT features a 'turn-key' system that handles everything from FPCB procurement to final module assembly in-house through its parent company, BH, enabling integrated operations.

Hyebin Kim, a research analyst at IBK Investment & Securities, explained, "During the initial mass production phase, where design changes are frequent, a vertically integrated supply chain is likely to serve as a key differentiator, reducing development lead times and improving yields for humanoid robot companies."

The decoupling of humanoid supply chains from China stems from strengthened U.S. regulations. In July, the U.S. Federal Communications Commission (FCC) added foreign-made advanced robots to its list of regulated items and banned new equipment certification. In line with policies that favor domestic components, the required local content requirement for U.S.-made parts must reach 65% by 2028 and over 75% after 2029.

Kim cited global investment bank Goldman Sachs, predicting that by 2035, the humanoid robot production volume involving Korea's supply chain, either directly or indirectly, will reach about 410,000 units, accounting for a 30% market share based on shipments.

DKT is expanding its supply portfolio in the robotics business to include charging modules and battery control modules. Its affiliate, BH EVS, is responsible for designing the charging modules, while DKT handles mass production.

Currently, DKT has already delivered over 2,000 wireless charging modules as proof-of-concept (PoC) samples for Boston Dynamics' humanoid robot Atlas and Hyundai Motor Group's Robotics Lab’s autonomous driving platform MobED. Whether to switch to mass production is expected to be decided within the fourth quarter. DKT also started producing battery protection modules in late August for a North American automotive OEM, whose customer is reportedly planning annual mass production on the scale of several million units.

Growth is also expected in the display segment. Approximately 60% of DKT’s revenue comes from FPCAs for organic light-emitting diode (OLED) panels, a segment that has historically been focused on smartphones but is now diversifying into IT devices and automotive applications. Starting with tablet deliveries in the third quarter, DKT plans to expand its lineup to include notebooks by 2027, and for automotive applications, it has secured an order backlog worth 330 billion won.

Kim added, “The visibility of the humanoid business will continue to be confirmed in the fourth quarter, and the expansion of applications within existing customer products, as well as the addition of new clients, offers a clear premium through collaboration with global humanoid players.”

This content was produced with the assistance of AI translation services.