Halla Cast: Growth Potential Overcomes Overhang Concerns

Stock Dips After Listing Amid Overhang Concerns
Rebounds Sharply After Falling to 4,355 Won on September 1
Order Volume Rises Across Future Vehicles and Humanoid Robots

The stock price of Halla Cast, a lightweight materials and components manufacturer, has surged significantly this month. Expectations that the company will secure orders for parts in various fields such as future vehicles, humanoid robots, and batteries have driven the stock price upward.

According to the financial investment industry on September 17, Halla Cast's stock price rose by 66.7%, from 4,600 won at the end of last month to 7,670 won as of the previous day.

Previously, on August 20, Halla Cast was listed on the KOSDAQ market at an initial public offering price of 5,800 won. After its listing, concerns over an overhang (potential selling pressure) led to a weak stock performance. On September 1, the stock fell to 4,355 won, marking its lowest point since listing. The proportion of shares available for trading immediately after listing was about 33%, and the share held by existing professional investors was relatively high at around 17%. Additionally, about 13% of shares were scheduled to be released from lock-up one month after listing.

The stock, which had been weak due to overhang concerns, has rebounded this month. The increase in new order volumes and the outlook for a significant rise in sales starting next year have served as catalysts for the stock's rebound.

Halla Cast is a company with unrivaled technological expertise in the field of magnesium die casting. Die casting is a manufacturing process in which metals such as aluminum, zinc, and magnesium are melted at high temperatures and injected into molds under high pressure to produce products. This method enables the rapid production of metal components with high precision, durability, and accuracy. Halla Cast is equipped with a wide range of die casting facilities, from 125 tons to 2,500 tons. The company supplies products to industries such as autonomous vehicles, connected displays, and robotics.

In the first half of this year, Halla Cast recorded cumulative sales of 76.8 billion won and an operating profit of 7.1 billion won. Compared to the same period last year, sales increased by 6.2% and operating profit grew by 13.5%.

Seungdoo Na, a researcher at SK Securities, stated, "Given its solid order performance, there are high expectations for improved results from next year onward," adding, "The expansion of demand for autonomous driving and display electronic components for future vehicles is continuing."

He further commented, "The surge in order volume since last year is expected to translate into sales within two to three years after going through product development and verification stages," and added, "By the first half of this year, the company had already secured about 350 billion won in new orders."

Cheolhwan Yoon, a researcher at Korea Investment & Securities, estimated, "This year, Halla Cast is expected to achieve sales of 169.6 billion won and an operating profit of 15.8 billion won," predicting increases of 17.4% and 28.6%, respectively, compared to last year. He emphasized, "While robust growth is expected in downstream industries, product and client diversification is also underway," and highlighted, "Attention should also be paid to collaboration with global artificial intelligence (AI) automobile companies, which will become more prominent from the end of this year."