[Click e-Stock] "Dreamtech Speeds Up Memory Module Expansion... Target Price Raised"

From 7,000 won to 12,000 won
"Performance is beginning to gain momentum, led by memory modules"

Kiwoom Securities raised its target price for Dreamtech from 7,000 won to 12,000 won on Oct. 8 and maintained its “Buy” rating.

Oh Hyun-jin, a researcher at Kiwoom Securities, said the company had made the change, citing “the need for a multiple rerating, particularly in the memory module segment, where performance is beginning to gain momentum.”

Dreamtech’s earnings are expected to be weak this year. The company is forecast to post revenue of 1.1196 trillion won, down 9% year over year, and operating profit of 20.4 billion won, down 35%.

“Although both revenue and profitability are expected to rebound in the second half from a weak first half, which was affected by pressure to lower prices for mobile components, our estimates also reflect conservative assumptions about exchange-rate effects,” Oh said. “Subsidiaries such as Cardiac Insight and A.I.Matics remain in the red, but their losses are expected to narrow slightly from the previous year.”

However, the company is expected to expand production capacity in response to strong demand for its memory module business. “Diversification of end customers is underway, particularly for server RDiMMs, and discussions are also ongoing to increase supply volumes,” Oh said.

“Following the production-facility expansion currently underway in the second half of this year, the company plans a further expansion in the first quarter of 2027,” Oh said. “Annual memory module production capacity, currently valued at around 200 billion won, is expected to exceed 400 billion won in 2027.”

Accordingly, Oh forecast that Dreamtech would post revenue of 1.4022 trillion won and operating profit of 53.7 billion won next year. “We have conservatively estimated the memory module segment relative to its expanding production capacity,” Oh said. “Given the strong demand, we believe higher future estimates could boost the company’s earnings capacity. We therefore maintain our Buy rating despite the sharp recent rise in the share price.”

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