[Click eStock] "Genoco, 4Q Earnings Increase... New Orders Exceed Sales"

DB Financial Investment Report

[Asia Economy Reporter Lee Kwang-ho] DB Financial Investment analyzed on the 19th that Genoco's sales increase in the core component development sector, including the production of non-contact optical cables, a key component of the fourth-quarter main business of mass production of the Tactical Information Communication Network (TICN), will be remarkable.

DB Financial Investment stated, "After overcoming temporary performance deterioration factors, sales growth is clear due to the seasonal peak effect," and added, "With increased sales contribution from the satellite sector, including next-generation medium-sized satellites, satellite communication system mass production, and ground station business, profitability improvement is expected along with the seasonal peak."

They further explained, "New orders in 2022 have already exceeded 60 billion KRW, and considering that the year-end is the peak season for orders due to the nature of the defense business, an additional 10 to 20 billion KRW in new orders is expected," adding, "This already greatly surpasses the estimated annual sales of 51.5 billion KRW for 2022 recognized from new orders."

They continued, "Due to the effect of new orders exceeding sales for four consecutive years since 2019, 2023 is expected to see both sales growth and profitability improvement."

They also emphasized, "Participation is expected in the ultra-small SAR satellite and KPS satellite projects, which are highly likely to be confirmed as order recipients in 2023," and highlighted, "Sales growth related to TICN mass production and satellite ground station business will lead short-term growth, and an increase in the proportion of satellite-related sales is expected in the mid-term."

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