Summary
Korea Circuit (KRX: 007810) is emerging as a potential beneficiary of AI server memory demand as SoCAMM-related substrate production gains momentum.
On October 20, 2026, Meritz Securities raised its target price to KRW 100,000, citing stronger memory module sales and improving earnings expectations. The shares closed at KRW 72,500 after trading as high as KRW 79,300.
The operational recovery is already visible. First-half 2026 consolidated operating profit reached KRW 45.7 billion, approaching the KRW 53.8 billion reported for all of 2025.
However, the latest SoCAMM forecasts have not yet been confirmed in third-quarter results.
The investment question is whether higher-value memory substrates can deliver sustainable earnings growth sufficient to justify the stock's valuation.
Key Takeaways
- ✓ Meritz Securities raised its target price to KRW 100,000 on October 20, reflecting stronger SoCAMM growth expectations.
- ✓ Q3 2026 standalone operating profit is forecast at KRW 19.6 billion, up 60.6% year over year.
- ✓ Meritz expects SoCAMM supply volumes to rise approximately 50% quarter over quarter in Q4, with additional customer opportunities in 2027.
- ✓ Korea Circuit's first-half consolidated operating margin improved to approximately 5.5%, demonstrating an established earnings recovery.
- ✓ The updated two-broker target average of KRW 97,500 implies 34.5% upside from the October 20 closing price, although execution and valuation risks remain.
What Happened
Korea Circuit shares rallied on October 20 following an upgraded earnings outlook from Meritz Securities.
The brokerage maintained its Buy rating and increased its target price from KRW 90,000 to KRW 100,000.
Meritz raised its Q3 2026 standalone revenue forecast to KRW 301.4 billion, up 32.4% year over year, and operating profit to KRW 19.6 billion, up 60.6%.
The revised operating profit estimate was 11.5% above its previous forecast.
Including subsidiaries, Meritz expects consolidated operating profit of approximately KRW 17.7 billion, modestly above the reported market consensus of KRW 17.2 billion.
The upgrade reflects growing SoCAMM-related production, which the brokerage says began generating meaningful sales in July.
These are analyst estimates, not reported third-quarter results.
Why It Matters
AI memory investment is creating opportunities beyond DRAM manufacturers.
Specialized substrates connect memory components and enable increasingly compact, high-performance server modules.
For Korea Circuit, greater demand for these substrates could improve its product mix and earnings resilience.
The opportunity is commercially significant because it builds on an established PCB manufacturing business rather than requiring an entirely new operating model.
Korea Circuit's earnings recovery provides a more credible foundation for its AI memory investment case than demand projections alone.
SoCAMM could support higher-value substrate sales, but the anticipated fourth-quarter volume increase and 2027 customer expansion remain brokerage forecasts.
After the stock's rally, confirmed shipments, sustainable operating margins and cash generation will be more important than announcements about potential demand.