[Click eStock] "SeAH Mechanics, Entering High Growth Phase in Sales by 2025"

Shinhan Investment Corp. analyzed on the 20th that SeAH Mechanics will enter a phase of rapid sales growth starting in 2025. No investment opinion or target price was provided.

Shinhan Investment Corp. forecasted that SeAH Mechanics has completed capacity (Capa) expansion and has reached a stage where gradual performance growth based on technological competitiveness and turnkey services will appear. Namgung Hyun, a researcher at Shinhan Investment Corp., stated, "In 2023, the sales composition by business segment consisted of 56% electronic components, 41% automotive parts, and 3% others," adding, "They provide turnkey services based on planning and design, not simply assembling parts (Ass’y)."

He explained, "In the electronics sector, sales growth is expected centered on TV demand recovery and product diversification," and "Capacity expansion more than doubled in the first quarter of this year," further stating, "The performance reflecting increased production volume is expected to be fully realized in 2025." He added, "Operating profit for 2024 and 2025 is projected to be 4.3 billion KRW and 6.8 billion KRW respectively, indicating profitability improvement as well."

He noted, "Although recent electric vehicle sales growth has been somewhat sluggish and there are concerns about the secondary battery industry," he predicted, "Automotive parts shipments are expected to steadily increase based on technological competitiveness."

He emphasized, "As of the first quarter of this year, the order backlog was confirmed at 550 billion KRW, and the company is currently processing some orders," adding, "Considering the long order cycle of finished product manufacturers, steady sales growth is expected to continue for more than 5 to 8 years."

He stated, "Although the company received a high valuation during its early 2023 listing and due to expectations in the secondary battery market, it is now in a phase waiting for a stock price rebound driven by growth in electronics and automotive parts performance."

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