[Click eStock] "Dong Sung Fine Tec, Expected to Achieve Record High Performance Next Year"

NH Investment & Securities Report

[Asia Economy Reporter Minji Lee] NH Investment & Securities maintained its buy rating and target price of 15,000 KRW for Dong Sung Fine Tec on the 6th. This is based on the expectation of record-breaking performance next year and the judgment that the company can benefit from the expansion of demand for eco-friendly ships.

Dong Sung Fine Tec is expected to achieve record-breaking performance next year due to explosive external growth. The demand for related equipment surged with the expansion of LNG ship demand, and the order backlog increased 3.3 times in four years, securing an order backlog worth about 1 trillion KRW. Compared to four years ago, sales volume increased by 1.5 times, and the order backlog stockpile expanded from 0.7 years to 2.7 years.

Jinmyung Choi, a researcher at NH Investment & Securities, said, “With the continued strong orders from shipbuilders in the second half of this year, it is expected that next year will see the achievement of the largest order backlog ever and a new record in sales.” He added, “Delivery schedules exceeding quarterly production capacity are also planned, so inventory is being stockpiled starting this year.”

The expanding demand for LNG-powered ships is also positive for the company. Recently, 60% of the orders received by domestic shipbuilders correspond to eco-friendly LNG-powered ships, and it is expected that orders for refrigerants will also increase as shipbuilders’ orders for container ships and tanker ships grow in the future.

Researcher Choi explained, “Liquefied hydrogen storage technology for ships is also attracting attention as a new growth area,” adding, “We are currently conducting technical research with the US ABS classification society and are striving to secure market dominance through patent applications.”

Due to the explosive increase in profit scale, it is expected to reach a net cash financial structure by the end of 2023. Researcher Choi analyzed, “Based on a solid financial structure, the company is expected to pursue strategies for external growth such as new business investments or mergers and acquisitions (M&A).” He added, “Expansion of gas-related businesses, mainly hydrogen and natural gas transportation technologies for ships, is anticipated, and there is a high possibility of entering fields beyond shipbuilding.”

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