[Click eStock] "Seojin System, Expected Growth in Communication Equipment and Secondary Battery Components"

Meritz Securities Report

[Asia Economy Reporter Minji Lee] Meritz Securities stated on the 24th that Seojin System is expected to see improved performance in its telecommunications equipment division and increased earnings from supplying secondary battery components.

Last year, consolidated sales amounted to 321.9 billion KRW, and operating profit was 4.9 billion KRW, representing decreases of 18% and 91% respectively compared to the previous year. Despite uncertain external conditions, the semiconductor, ESS, and other divisions grew by 93%, 17%, and 15% year-on-year respectively, but the telecommunications equipment division declined by about 49% due to delays in 5G investments. Researcher Jisoo Jung from Meritz Securities explained, “There is a fixed cost burden due to proactive facility investment expansion and workforce recruitment for 5G investment,” adding, “From the first quarter, significant top-line growth will be evident, leading to markedly improved earnings.”

This year, consolidated sales are expected to reach 707.8 billion KRW, and operating profit is forecasted at 82.7 billion KRW, representing growth of 119% and 1584% year-on-year respectively. Following the conclusion of the US C-Band frequency auction, Verizon announced plans to expand 5G investments, and India has finalized its 5G frequency auction schedule, with orders expected to begin in mid-year.

Researcher Jung noted, “It is also positive that Samsung Electronics signed new 5G equipment supply contracts with Canada’s Sask Tel and Japan’s NTT Docomo,” adding, “In the 5G business, besides Samsung Electronics, global number one customer-specific equipment supply has recently started, so telecommunications equipment sales this year are expected to grow about 179% year-on-year to 287.8 billion KRW.”

Supplying secondary battery components is also a positive factor. Starting in the second half of this year, Seojin System plans to begin supplying secondary battery components to Samsung SDI. Although initial volumes are not large, sales size is expected to expand as supply stabilizes and customer diversification progresses. Researcher Jisoo Jung stated, “From next year, the secondary battery components business will surpass telecommunications equipment sales.”

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