[Click eStock] "Sejin Heavy Industries, Subsidiary Value Expected to Stand Out"

[Asia Economy Reporter Park Jihwan] Shinhan Financial Investment maintained a 'Buy' rating and a target price of 8,800 KRW on Sejin Heavy Industries on the 16th, highlighting the value of its subsidiary Ilseung, which is planning to go public in the first half of next year.

Hwang Eoyeon, a researcher at Shinhan Financial Investment, stated, "Ilseung, a subsidiary acquired for 10 billion KRW in October 2017, is scheduled to be indirectly listed through a merger with Mirae Asset Daewoo SPAC No. 4 in the first half of next year," adding, "The merged company Ilseung was recognized by an accounting firm with a corporate value of 47.6 billion KRW."

Securing new growth drivers in the core business is also positive. Through the high-margin STP (sewage treatment plant) business and expansion into new businesses, an average annual sales growth of 7.9% is expected by 2024, according to researcher Hwang's assessment.

As of last year, Ilseung's ship STP accounts for 28.0% of its sales, with a domestic market share of 86% and a global share of 23%. Researcher Hwang emphasized, "It remains the number one domestic STP company with a stable market share," and added, "Currently, it is only used for general cargo ships, but market share expansion is expected with entry into ferry ships, cruise ships, and high-speed rail."

Notable new growth businesses include scrubbers, LNG regasification facilities, and wind direction testers (Lidar radar) for wind power generation. Next year, in addition to the subsidiary's indirect listing, achievements in new business ventures are expected to be confirmed, and in 2022, orders for the Donghae 1 wind power substructure are also anticipated.

Researcher Hwang emphasized, "Through continuous product diversification and new business entry, growth exceeding that of the traditional shipbuilding industry is expected."

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