[Market Focus] SNT Energy Surges on Surprise Q2 Earnings

As of 9:30 a.m. on July 24, SNT Energy's share price on the Korea Exchange was up 29.95% from the previous day's closing price, trading at 49,250 won. This surge appears to be due to the company announcing preliminary second-quarter results that exceeded market expectations.

SNT Energy designs and manufactures air coolers, which are used in chemical plants such as oil and gas refining plants and petrochemical plants, as well as heat recovery steam generators (HRSG), which are used in combined cycle power plants, cogeneration plants, and nuclear power plants. Unlike water-cooled systems that use seawater, air coolers dissipate heat using air, making them particularly suitable for desert or inland regions where water is scarce. As a result, SNT Energy has a high proportion of exports to the Middle East, and its main clients are major Middle Eastern plant EPC (engineering, procurement, and construction) companies.

On this day, SNT Energy announced that its consolidated operating profit for the second quarter was 27.364 billion won, up 445.1% from the same period last year. According to FnGuide, the average second-quarter operating profit forecast by three securities firms was 13 billion won. During the same period, revenue increased by 109.2% to 140.681 billion won. Net profit for the period rose 31.7% to 10.969 billion won. The smaller increase in net profit compared to operating profit was due to a foreign exchange loss of 14.025 billion won, reflecting the decline in the dollar exchange rate (from 1,466.50 won at the end of March to 1,356.40 won at the end of June).

On July 11, Kim Saeryeon, a researcher at LS Securities, stated in a report, "Last year, SNT Energy achieved a record high by securing 700 billion won in new orders in the air cooler segment alone," and added, "The order backlog, including HRSGs and other products, totals 819.9 billion won, which is equivalent to 2.8 times last year's annual revenue." She also noted, "Additional orders are expected within this year amid the big wave in the U.S. LNG market, and SNT Energy remains attractive in terms of valuation compared to its U.S. peers." She analyzed, "Based on strong results and additional orders, SNT Energy's share price is likely to be re-rated."

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