[Click eStock] "Amogreentech Secures Tesla and Rivian as Clients... Potential for Increased Corporate Value"

[Asia Economy Reporter Lee Jung-yoon] Hana Securities initiated coverage on Amogreentech on the 29th with a buy rating and a target price of 20,000 KRW. The analysis highlighted that the company has secured clients such as Tesla and Rivian amid the growing electric vehicle market.

Amogreentech is expected to experience rapid growth in sales of high-efficiency magnetic components due to the increase in electric vehicle production, along with expansion in the battery business for electric locomotives targeting advanced countries like Australia and the United States. Additionally, with the increase in 5G base stations and Japan's promotion of BCP (Business Continuity Plan), sales of energy storage systems (ESS) for base stations are projected to rise, sustaining high growth. The company is considered to be in a phase where a sharp increase in corporate value is possible.

Amogreentech has been supplying high-efficiency magnetic components to Tesla for the past three years and began exclusive supply to Rivian from the second half of 2021. Tesla currently has a production capacity of 1.9 million units, with production expected to sharply increase from 1.5 million units this year to 2.4 million units in 2023 and 3.5 million units in 2024. Rivian confirmed a production volume of 25,000 units this year and has secured pre-orders exceeding 90,000 units. Although smaller than Tesla, Rivian is an electric vehicle specialist focusing on high-power trucks, and an increase in the size or number of adopted high-efficiency magnetic components is expected to raise the average selling price (ASP) per vehicle.

Furthermore, Amogreentech is supplying or negotiating to supply high-efficiency magnetic components to numerous domestic and international automakers. With the trend toward higher power and capacity in electric vehicles and the steep increase in production by electric vehicle manufacturers, Amogreentech’s magnetic component sales are expected to grow rapidly.

Amogreentech’s sales this year are analyzed to increase by 35% year-on-year to 164.8 billion KRW, and operating profit is expected to surge by 805.6% to 16.3 billion KRW. Moreover, with the battery business and sales to new clients fully ramping up next year, sales are projected to rise 38.1% year-on-year to 227.6 billion KRW, and operating profit is expected to increase by 67.5% to 27.3 billion KRW. Researcher Kim Gyu-sang of Hana Securities explained, “As Amogreentech’s main sales shift from mobile to the electric vehicle and ESS industries, sales expansion and operating profit margin improvement are anticipated.”

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