Why We Need to Focus on Mercury's New Business

[Asia Economy Reporter Hyunseok Yoo] An analysis has emerged suggesting that attention should be paid to the new business Mercury is entering.

According to the financial investment industry on the 27th, Mercury held its regular shareholders' meeting on the 22nd and added the electric motorcycle (hereinafter E-Bike) business to its business objectives.

Yongho Kim, a researcher at Hanyang Securities, said, "As part of entering the eco-friendly mobility market, Mercury acquired a 12.5% stake in Ames last year," adding, "Ames is launching an E-Bike battery sharing and subscription service." He continued, "Mercury will be responsible for manufacturing Ames' E-Bikes and battery stations."

He also expected that a market preemption effect in the E-Bike sector could emerge. He explained, "The anticipated aspect is the market preemption effect. In October last year, Ames and Mesh Korea signed a memorandum of understanding (MOU) to establish an E-Bike and battery station system," adding, "Collaboration with Mesh Korea, which has over 43,000 riders, is expected to secure early subscribers and enable early station construction."

He emphasized, "Taiwan's Gogoro, which has the same business structure, has grown into a unicorn company by achieving more than double sales growth annually since 2015," and added, "I believe Mercury and Ames are at the forefront of the paradigm shift in the domestic electric motorcycle market."

Additionally, Researcher Kim stressed that Mercury's profits are entering a full-scale expansion phase. He said, "The outlook for the core business this year is also favorable, driven by increased sales of WiFi6 AP and EasyMesh AP, as well as profitability improvements through cost and process efficiency enhancements in the optical communication division," adding, "New sales are expected to arise from the mobility business starting this year, and fixed cost effects due to scale expansion will also appear."

He continued, "This year's terminal business sales are estimated at a minimum of 129.1 billion KRW," emphasizing, "Even looking only at the terminal business, this is the level of total annual company sales during the profit expansion period of 2017-2018. Significant performance growth is expected this year, and the same trend is anticipated to continue next year."

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