[Click eStock] "Wooshin Systems Enters Full-Scale Profitability Recovery...Undervalued Status Expected to Improve"

On May 22, Hanyang Securities analyzed that Wooshin Systems is expected to enter a full-scale phase of profitability recovery this year.

Lee Joonseok, a researcher at Hanyang Securities, stated, "As profitability in the safety division, which has been the company's main challenge, is becoming visible, 2025 is expected to mark the beginning of a company-wide profitability recovery phase."

Wooshin Systems' consolidated results for the first quarter of this year exceeded market expectations. Revenue reached 102.5 billion KRW, up 78.3% year-on-year, while operating profit surged 348.2% to 9.1 billion KRW. The operating margin stood at 8.9%, indicating a clear improvement in profitability. This strong performance was driven by approximately 40 billion KRW in sales from high-margin secondary battery automation equipment. At the same time, the safety division also solidified its turnaround by recording 47 billion KRW in sales and a 4% operating margin.

In particular, the safety division, which had continued to post losses through 2023, reached breakeven last year and has now entered a phase of significant profitability improvement in the first quarter of this year, raising expectations.

The annual outlook for this year forecasts revenue of 475.6 billion KRW and operating profit of 30.8 billion KRW, representing decreases of 15.6% and 14.7%, respectively, compared to the previous year. This is attributed to the base effect from last year’s high growth, but the fundamental growth drivers remain intact. Researcher Lee projected, "The 135 billion KRW backlog of secondary battery automation equipment orders carried over from last year will mostly be recognized as revenue, and about 170 billion KRW in sales is expected from the safety division, boosted by the launch of new models by automakers."

For the second half of the year, there is a high likelihood of additional orders, including those for the European market, providing ample upside potential for revenue. In addition, as overseas subsidiaries establish stable operations, profitability is gradually improving, and operating leverage effects from increased sales are also anticipated.

Wooshin Systems is strengthening its position as a key turnkey solution provider in the industry by maintaining a stable profit base in its traditional automotive body automation equipment division while rapidly expanding in the secondary battery equipment sector.

The current stock price is considered significantly undervalued relative to the company’s earnings and profitability. Researcher Lee advised, "Rather than approaching the company’s valuation as a traditional auto parts manufacturer, it is necessary to reflect structural improvements in its profit model and the high growth potential of new businesses such as secondary battery automation equipment." He added, "This should be interpreted as a structural shift, showing that the company is transforming from a simple manufacturer into a turnkey-based high-value solution provider in automation equipment."

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