AD Technology is a design house that does not make chips itself but handles the back end of designing custom chips (ASICs) that clients want, refining them so a foundry can actually manufacture them; its business splits into design services and a turnkey operation that takes full responsibility all the way from masks and prototypes to mass production, and as a Design Solution Partner (DSP) of Samsung Electronics' foundry its results hinge on demand for custom chips for AI, data centers and autonomous driving. A string of supply contracts and orders was disclosed in April, showing steady new design and mass-production orders; the same month it decided to issue convertible bonds, and on May 15 a quarterly report disclosed first-quarter results (revenue of ₩36.0 billion, operating loss of ₩0.36 billion). The key point to note recently is that its 2025 turn to profit and quickening revenue growth give it a reasonable forward P/E advantage versus peer profitable design houses, but its earnings are still small in scale with large quarterly swings, its debt-to-equity ratio is high, and dilution from the convertible bonds remains possible, so the timing at which orders are recognized as revenue and the pace of earnings stabilization are what matter.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt is somewhat higher than equity (debt ratio 216.7%).
- Operating profit barely covers the interest bill (interest coverage below 1x).
- Revenue rose 54.4% year over year, and the pace is quickening (3-year trend: rising).
- Net profit swung from a loss a year earlier back into the black (a turnaround).
- Most recent quarter (Q1 2026) revenue was 10.4% higher than a year earlier.
- ROE is 2.7% (controlling-interest basis). It is above the sector average.
- Operating margin is 1.7%.
- The P/E sits above the sector median, reflecting elevated expectations.
Ownership & governance As of 2025-12-31
Largest shareholder Kim Jun-seok 17.78% (individual)
Controlling bloc incl. related parties 18.01%
With the controlling bloc holding 18%, control is maintained but the free float is relatively large.
🔎 In-depth analysis
- AD Technology is not a company that makes and sells chips itself; it is a "design house" that takes on the back end of designing semiconductors (ASICs, chips custom-built for specific uses) with the functions a client wants, and refines them so those chips can actually be manufactured at a foundry (a contract chip-making plant).
- Its role splits into two broad lines.
- One is design services that precisely implement a chip's circuits, and the other is a turnkey business that takes a client's idea-stage chip and assumes full responsibility from design through mask fabrication, prototyping and connecting to mass production.
- The turnkey portion grows larger because the volume outsourced to the foundry is also booked as revenue, but the margin the company keeps depends not on the full chip price but on the value added within it.
- The company is a verified partner as a Design Solution Partner (DSP) of Samsung Electronics' foundry, and recent demand comes from fields that need many custom chips, such as AI, data centers and autonomous driving.
- In short, this is a business whose results hinge on how many large chip mass-production projects it wins from various clients, and on what terms.
- The recent close is ₩35,450 and the market cap is ₩477.2 billion.
- The price is above its 20-day line (₩32,495) but below its 60-day line (₩42,364), so the short- and medium-term trends diverge and should be read separately.
- The RSI (an auxiliary indicator comparing upward and downward momentum over the past 14 days on a 0-100 scale) is 53.2, at a neutral level.
- The one-month change is +2.2%, the three-month change is -27.8%, and the position versus the 52-week high is -41.4%.
- Relative strength versus the KOSDAQ is 85 (on a 1-99 scale, converting the past year's return versus the index with more weight on recent periods; higher means stronger than the market), placing it in roughly the top 14% of all stocks by strength.
- Over the past three months it lagged the index by 10.7%.
- Chart interpretation is best done alongside trading volume and disclosure dates.
- Based on confirmed results for last year (FY2025), the trailing P/E (the price divided by earnings per share) is 132.33x and the P/B (the price divided by net assets per share) is 3.52x.
- The P/E looks high at three digits not because the stock is that expensive but because this was the first profitable year right after exiting losses, so earnings (₩3.6 billion) are still small and the denominator is small.
- Against profitable peer design houses (for example, cases with a P/E in the 30x range), this is actually a lower level, a sign the market is not pricing this company especially expensively.
- On profitability, ROE (how much was earned in a year on shareholders' equity) is 2.7%, above the peer average, and the operating margin is 1.7%.
- As this is the first year of a turn to profit, the absolute levels are still low, but the direction is up.
- Financially, the debt-to-equity ratio (debt relative to equity) is somewhat high at 216.7% and the interest coverage ratio (whether operating profit can fully cover interest) is below 1x, so until earnings build up more thickly the debt burden is a point to watch.
- The growth trend is distinct.
- Annual revenue was ₩100.2 billion in 2023, ₩106.5 billion in 2024 and ₩164.5 billion in 2025, rising 54.4% in the last year alone, with the pace of increase itself quickening.
- The more important change is in the bottom line.
- After two straight years of operating losses in 2023-2024 (-₩17.4 billion and -₩17.0 billion respectively), 2025 turned to profit with operating profit of +₩2.9 billion and net profit of +₩3.6 billion.
- The fact that this was the first year of crossing from loss to profit is the core of this stock.
- In a stretch where earnings are just reviving, the picture based on this year's expected earnings is closer to actual value, and the price relative to this year's earnings is lower than that of peer profitable design houses.
- Such forward figures reflect a trend in which demand for custom chips for AI and data centers rises, and as the mass-production projects the company has won begin to be recognized as revenue, margins normalize.
- In the first quarter of 2026 revenue rose 10.4% year on year so growth continued, but operating profit was a slight loss of -₩0.36 billion and net profit was +₩0.36 billion.
- The design-house business tends to swing quarter to quarter depending on the timing at which large mass-production projects are recognized, so rather than judge the trend from a single quarter's number, it is right to view it alongside the annual trend and order progress.
- That said, the current materials give no clear basis to conclude that next year and beyond will be lower than this year.
- Recent disclosures show both faces of the business at once.
- From April 15 to 17, supply contracts and orders (individual single sales) were disclosed in succession, a direct signal that the core of a design house, new design and mass-production orders, keeps coming in.
- Meanwhile, on April 21 it decided to issue convertible bonds (bonds that can be converted into shares), and an extraordinary general meeting was held on April 29.
- Convertible bonds are a funding tool that secures cash right away, but it should also be noted that once they later convert into shares, the number of shares outstanding rises and existing shareholders' stakes can be diluted.
- On May 15 a quarterly report disclosed confirmed first-quarter results (revenue of ₩36.0 billion, operating loss of -₩0.36 billion), and on May 26 the holding of an investor relations (IR) event was disclosed, providing a setting for the company to explain its business status directly.
- In sum, orders are coming in but the funding phase is being filled by external financing, and quarterly results still swing considerably.
- Starting with the strengths, demand for custom chips for AI and data centers underpins the design-house business and new orders keep coming in, while the turn from loss to profit in 2025 is clear.
- The pace of revenue growth is also quickening, and even though last year's P/E looks high at three digits, the forward P/E based on this year's earnings is at a reasonable level versus peer profitable design houses.
- In other words, this is a position that can be read as fairly valued: an inflection stock with reviving earnings whose valuation burden is not excessive.
- The cautions are that the absolute scale of earnings is still small and quarterly swings are large.
- The debt-to-equity ratio is high and interest coverage is below 1x, so financial headroom is tight until earnings build up further, and dilution from the convertible bonds remains possible.
- In conclusion, this stock presents a picture where, if the mass-production orders it has won normalize into revenue and earnings and quarterly results settle into stable profit, its forward valuation appeal comes to the fore; conversely, if recognition of large projects is delayed and quarterly losses recur, earnings stay small and trailing metrics stand out again.
- Which way it goes depends on the timing at which orders are recognized as revenue and the pace of earnings stabilization.
🔎 Valuation vs peers Inconclusive
Because AD Technology is in substance a semiconductor design house (design services plus turnkey), domestic design houses with the same business structure were used as the primary comparison set, with semiconductor materials companies as a secondary reference; all on-site figures are based on the current price.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Gaonchips | — | 12.04x | -26.27% |
| ASICLAND | — | 4.23x | -48.04% |
| Hana Materials | 26.13x | 2.16x | 8.28% |
(a) The true comparison set, Gaonchips and ASICLAND, are design houses too but are currently loss-making, so no P/E can be computed and their ROE is also negative. In other words, this industry is at a point where it is hard to line up on an earnings basis right now, making AD Technology's profitability last year (ROE +2.7%) a relative strength. (b) On asset value (P/B) it sits in the middle, lower than design-house peers and higher than materials companies, so it is hard to declare a clear premium or discount. (c) Above all, the trailing P/E of 100.78x is a distortion typical of an earnings inflection stretch, and with no official company forward figures available, overvaluation cannot be confirmed from last year's multiple alone. Accordingly, factoring in the recurrence of a first-quarter operating loss and seasonality, we leave it Inconclusive and flag the persistence of quarterly profit as a matter for further confirmation.
Earnings outlook company-stated · verified
| Type | Period | Revenue | Operating profit | Net profit |
|---|---|---|---|---|
| Next quarter | Q2 2026 | approx. ₩32.4 billion | — | — |
Price history Close · MA20 · MA60
The latest close is ₩35,450 and the market capitalization is ₩477.2 billion. The price sits above its 20-day moving average (₩32,495) and below its 60-day moving average (₩42,364). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 53.2, a neutral level. The one-month change is +2.2%, the three-month change is -27.8%, and the position relative to the 52-week high is -41.4%. Relative strength versus the KOSDAQ is 85 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 86% of all stocks. Over the past three months it lagged the index by 10.7%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -10.72% / 6M +31.13% / 12M +71.94%
Key metrics vs sector median
Valuation
The P/E of 132.33x is above the sector median (27.09x). The P/B of 3.52x is above the sector median (2.10x).
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Profitability & financials
The operating margin is 1.7%. The debt ratio is 216.7%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $66.4M | $70.6M | $109.0M | +54.41% ↑ faster |
| Operating profit | -$11.5M | -$11.2M | $1.9M | — |
| Net profit | -$10.6M | -$9.4M | $2.4M | — |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $213.5M | $108.9M | $66.4M | $70.6M | $109.0M |
| Operating profit | $7.5M | $2.9M | -$11.5M | -$11.2M | $1.9M |
| Net profit | $10.0M | $3.9M | -$10.6M | -$9.4M | $2.4M |
| Revenue CAGR | 4-yr avg -15.46% | ||||
Revenue rose 54.4% year over year (2023 ₩100.2 billion → 2024 ₩106.5 billion → 2025 ₩164.5 billion), and the three-year trend is 'rising'. The pace of growth also quickened from the prior year. Over the 5 years on record, revenue compound annual growth (CAGR) is -15.5%. The two-year revenue CAGR is 28.1%. In the most recent quarter (Q1 2026), revenue was 10.4% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- Revenue grew 54.4% year over year, a sign of growth.
Points to watch
- The price is high versus peers, so expectations already appear priced in.
Recent news & events searched · sourced
- 2026-04-15UpdateDisclosure of a single-sale and supply contract (initial on 4/15, including corrections on 4/15 and 4/17). A disclosure signaling that supply orders related to new design and mass production, the core of a design house, have been secured.In the short term this is order momentum; in the medium term, the timing and scale at which the volume is actually reflected in quarterly revenue and earnings are what matter. Source
- 2026-04-21FilingReport on major matters (decision to issue convertible bonds). A decision to raise funds by issuing bonds convertible into shares.In the short term this secures operating and investment funds, but in the medium term, if conversion proceeds, the rise in shares outstanding can dilute existing shareholders' stakes, so it should be viewed alongside the financial structure. Source
- 2026-05-15EarningsFiling of the quarterly report (2026.03). An official document containing confirmed first-quarter 2026 results (revenue of about ₩36.0 billion, operating profit of about -₩0.36 billion, net profit of about ₩0.36 billion).Revenue rose +10.4% year on year, but the operating level swung back to a loss, making this a benchmark for checking whether last year's annual turn to profit carries through on a quarterly basis. Source
- 2026-05-26IRDisclosure of an investor relations (IR) event. A setting the company arranged to explain its business status and direction directly.An opportunity to confirm the business and earnings context through an official channel, and to review the company's account following its orders and financing. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| FY2025 annual revenue | ₩164.5 billion(₩164,511,629,858) | ₩164.5 billion | Confirmed | link |
| First-quarter 2026 revenue | ₩36.0 billion(₩36,032,593,804) | ₩36.0 billion | Confirmed | link |
| First-quarter 2026 operating profit | -₩0.4 billion(-₩357,067,847) | -₩0.4 billion | Confirmed | link |
| 2026 annual revenue (seasonality approximation) | approx. ₩162.2 billion | — | Unverified | link |
Recent filings
- 2026-05-26Disclosure
- 2026-05-15PeriodicQuarterly report
- 2026-04-29Disclosure
- 2026-04-23OwnershipOfficers'/major-shareholders' holdings report
- 2026-04-23OwnershipOfficers'/major-shareholders' holdings report
- 2026-04-23OwnershipOfficers'/major-shareholders' holdings report
- 2026-04-23OwnershipOfficers'/major-shareholders' holdings report
- 2026-04-21Material-fact report
- 2026-04-17Single supply/sales contract (amended)
- 2026-04-15Single supply/sales contract (amended)
- 2026-04-15Single supply/sales contract
- 2026-04-02OwnershipOwnership-change filing
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.