[Click eStock] "Dong-A Hwasung, Growth Expected in Electric, Hydrogen Cars and Fuel Cells"

[Asia Economy Reporter Yoo Hyun-seok] KB Securities analyzed on the 22nd that Dong-A Hwasung is expected to take off with a triangular alliance of electric vehicles, hydrogen vehicles, and fuel cells. No investment opinion or target price was presented.

Dong-A Hwasung is a manufacturer of special rubber parts for automobiles, home appliances, and industrial use. Its main products include automobile intake and exhaust hoses, battery pack gaskets, and door gaskets that provide vibration absorption and cushioning functions for drum washing machines.

In the third quarter of last year, sales and operating profit recorded 76.5 billion KRW and 6.2 billion KRW, respectively. This represents increases of 3.8% and 204.9% compared to the same period last year. Researcher Lim said, "With the recent resumption of economic activities and the recovery of operating rates at major overseas subsidiaries such as in China, a quarterly record high operating profit was achieved," adding, "Future profit normalization is expected to accelerate."

Researcher Lim evaluates Dong-A Hwasung's eco-friendly green items such as electric vehicles, hydrogen vehicles, and hydrogen fuel cell businesses as attractive. He explained, "It is expected to emerge as a representative small-cap company related to the Green New Deal," and added, "Battery pack gaskets for electric vehicles are supplied to Hyundai Motor, US GM, and China’s First Automobile Works, and there are plans to expand production capacity in the future." He further noted, "Sales of battery pack gaskets for electric vehicles increased sharply from 5.5 billion KRW in 2019 to 10.5 billion KRW in 2020, indicating steep growth prospects."

He also emphasized the need to pay attention to the growth potential of the subsidiary. He explained, "Dong-A Fuel Cell is developing a 5kW-class high-temperature polymer electrolyte fuel cell system," adding, "KC and KS certifications are forthcoming, which means commercialization is imminent and signifies a takeoff as a fuel cell company."

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