Susan INT, Stable Performance with Exclusive Position in Terminal Access Management

KT, SK Broadband, and LG Uplus Provide Device Access Management Service
Incorporation into Lee Jae-myung Theme Stock Following Recruitment of SW Expert Former Support Chairman
Expected Benefits from Digital New Deal Promotion...Only Domestic Company with Device Identification Technology

Although the election to choose the next president is still 1 year and 8 months away, speculative funds betting on leading presidential candidates are rapidly increasing in the domestic stock market. The stock price volatility of political figures ranking high in the '2022 presidential candidate approval ratings,' such as Lee Nak-yeon, a member of the Democratic Party of Korea, and Lee Jae-myung, Governor of Gyeonggi Province, has also increased. Stocks related to Lee Jae-myung, whose approval ratings surged following the Supreme Court's acquittal ruling, such as ATEC, Hyungji Elite, and Susan INT, have risen sharply. Asia Economy aims to examine the business performance and financial stability of political theme stocks.

[Asia Economy Reporter Park Hyung-su] Susan INT joined the ranks of Lee Jae-myung, Governor of Gyeonggi Province, insider stocks this year. This was largely influenced by the appointment in March of Lee Hong-gu, Chairman of the Korea Software Industry Association, who served as co-chairman of Lee Jae-myung's campaign support committee during the '7th nationwide simultaneous local elections' in 2018, as a co-CEO.

Susan INT is the only company in Korea providing shared terminal access management services. Shared terminal access management service allows customers using multiple terminals to connect only two devices to the internet and blocks internet access for terminals exceeding two, thereby encouraging subscription to additional services.

Susan INT maintains a monopoly supply position through securing technological capabilities via research and development (R&D) and intellectual property rights through patent applications. Providing shared terminal access management services requires identification and blocking technology for terminals (PCs) accessing the internet, large-scale infrastructure capable of analyzing traffic from high-speed internet subscribers, and service operation know-how.

Susan INT uniquely possesses technology in Korea that identifies terminals connected to the internet solely through traffic filtering. It has traffic processing technology capable of handling over 40G per server and real-time subscriber authentication technology.

The shared terminal access management service is exclusively supplied to KT, SK Broadband, and LG Uplus. As of March this year, these three companies occupy 86% of the entire high-speed internet market. Susan INT has secured an oligopolistic market share in the shared terminal access management service market.

Due to its monopolistic position in shared terminal access management services, Susan INT's performance stability is high. From 2017 to 2019, Susan INT's sales remained around 16 billion KRW. Profits have been steadily generated as well. However, due to stagnant sales, a new growth engine is needed.

The financial condition is sound. As of the end of the first quarter, Susan INT's debt ratio is only 3.5%. Net borrowings remain negative. Short-term financial assets amount to 32 billion KRW. Based on a stable financial structure, the company has been continuously investing in business diversification recently. In January and April this year, it participated in a third-party allotment capital increase of its affiliate Susan EnerSol. It invested a total of 7.4 billion KRW to acquire a 66.4% stake in Susan EnerSol, a developer of aluminum polymer capacitors.

Susan INT can benefit from the government's promotion of the 'Korean New Deal,' a core pillar of which is fostering the Digital New Deal. If the Internet of Things (IoT) digital infrastructure is activated, the number of terminals connected to the internet will surge. As various home appliances connect to the internet, the traffic of Internet Service Providers (ISPs) will increase sharply. The demand for Susan INT's shared terminal access management service, which uniquely possesses terminal identification technology in Korea, will also increase accordingly.

The reason for recruiting CEO Lee, an expert in the software field, was to entrust him with establishing overseas strategies and discovering new businesses for Susan INT. CEO Lee served at IBM Korea and Hewlett-Packard (HP) Korea and was CEO of Hancom from December 2010 to early 2016. He was inaugurated as the 17th Chairman of the Korea Software Industry Association last year. He has also been serving as Chairman of the Gyeonggi Job Foundation since 2018.

Susan INT's stock price is focusing more on its connection with Governor Lee Jae-myung than on CEO Lee's abilities and roles. After the Supreme Court overturned the original ruling with a verdict of not guilty regarding Lee Jae-myung's charge of false information disclosure, Susan INT's stock price rose by about 50%.

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