Nano Hits Record High on Expectations of AI Data Center Boost

Stock Price Surges 105% Since November
Rising Demand for High-Density Diesel Catalysts for AI Data Centers

The corporate value of Nano, which saw a sharp increase in operating profit in the third quarter of this year, is rapidly growing. While its existing business divisions are expanding, expectations for increased sales of high-density diesel catalysts for artificial intelligence (AI) data centers-being fostered as a new growth engine-are also contributing to the rise in its stock price.

According to the financial investment industry on December 8, Nano’s stock price has surged by 105.5% compared to the end of October. On December 5, it reached a new annual high of 4,015 won during trading hours. Its market capitalization has expanded to 122 billion won.

Nano manufactures denitrification catalysts that reduce nitrogen oxides (NOx) generated during fossil fuel combustion. The company supplies denitrification catalysts to thermal power plants, industrial plants such as steel, petrochemical, and cement facilities, and incinerators that generate energy by burning fossil fuels or waste. As major governments around the world strengthen regulations on nitrogen oxide emissions, demand for denitrification facilities continues to increase.

Nitrogen oxide reduction technologies include pre-combustion and post-combustion treatment. Most facilities adopt technologies that reduce nitrogen oxides after combustion. The selective catalytic reduction (SCR) denitrification method, which offers the highest efficiency and cost-effectiveness, is the most widely used. SCR denitrification catalysts remove nitrogen oxides and dioxins from exhaust gases emitted by power plants, industrial boilers, incinerators, ships, and diesel engines.

In the third quarter of this year, Nano recorded sales of 34.5 billion won and an operating profit of 5.5 billion won, up 33% and 962%, respectively, compared to the same period last year. Profitability improved as the downstream markets, such as combined cycle power plants and marine engines, expanded. Kiwoom Securities estimated that Nano will achieve sales of 90.9 billion won and operating profit of 7.3 billion won this year, representing increases of 2.6% and 339%, respectively, over last year.

By supplying high value-added products for AI data centers, Nano has secured a new growth driver. Kang Kyungkeun, a researcher at NH Investment & Securities, stated, "Interest in backup power for data centers is increasing, leading to a rise in the installation of diesel emergency generators. In terms of emergency generator market share by fuel type, diesel accounts for 74% due to its advantages in startup speed and maintenance."

He added, "For diesel engines, SCR catalysts are essential, and this will expand Nano’s business opportunities."

Nano is building a second dedicated plant for high-density diesel catalysts for AI data centers. Upon completion of the new plant, the company’s annual production capacity will increase from approximately 80 billion won to 150 billion won. The unit price of high-density cell (honeycomb) catalysts is reportedly more than 2.5 times higher than that of existing products.

Oh Hyunjin, a researcher at Kiwoom Securities, commented, "Nano is also working on supplying denitrification catalysts for AI data center generators in North America. With the full impact of the new plant expected next year, we anticipate that operating profit will increase by 79% compared to this year." He further explained, "The operating rate of the new plant could rise depending on the acquisition of global clients and the conclusion of large-scale supply contracts."

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