[Special Stock] Samyoung Electronics, Net Cash of 280 Billion Won and Real Estate Worth Twice the Market Cap 'In the Spotlight'

Published 01 Dec.2023 13:10(KST)

Samyoung Electronics is showing strength. The analysis that its market capitalization is smaller than its net cash holdings seems to be influencing the stock price.

As of 1:09 PM on the 1st, Samyoung Electronics is trading at 8,570 KRW, up 5.15% from the previous day.

Heo Min-ho, a researcher at the Korea IR Association, explained, "As of the third quarter of 2023, net cash is 281.5 billion KRW," and added, "Considering the 21.9 billion KRW investment expenditure for acquiring an 8% stake in Japan's Chemicon in the fourth quarter, EBITDA from operating activities, and working capital, the company holds more than 260 billion KRW in net cash."

He continued, "The book value of land is 65.5 billion KRW," and added, "Even if only net cash and the book value of land are simply calculated without reflecting business value, the liquidation value is at least 325.5 billion KRW."

He analyzed, "The current market capitalization of 170 billion KRW is lower than the liquidation value," and "EBITDA is expected to be 15.2 billion KRW in 2023, 16.6 billion KRW in 2024, and 20.5 billion KRW in 2025." Furthermore, he emphasized, "Annual maintenance investment for existing facilities is at the level of 3 to 5 billion KRW," and "Even if investment in hybrid capacitor-related facilities increases, considering that the facility investment amount is expected to be around 10 billion KRW, the structure is such that cash continues to accumulate."

Researcher Heo predicted, "The sales proportion for automotive components based on the domestic headquarters will expand from 12% in 2022 to 18% in 2023, 21% in 2024, and 25% in 2025," and "This will drive performance improvement."

He explained, "Automotive component electrolytic capacitors consist of existing aluminum electrolytic capacitors, solid capacitors, and some hybrid capacitors imported and supplied from Japan's Chemicon," and "Samyoung Electronics plans to invest a total of 30 billion KRW from 2023 to 2027 to produce hybrid capacitors in-house."

He added, "Production capacity will gradually expand until 2027," and "Hybrid capacitors are high-priced products nearly twice as expensive as existing products." He also said, "On October 11th, we acquired an 8.0% stake in Japan's Chemicon and decided to strengthen technological and sales cooperation with Chemicon," and "This will serve as a foundation to accelerate the advancement of the product portfolio toward high value-added growth markets such as automotive components and ICT."

It is estimated that next year sales will reach 196 billion KRW and operating profit 9.8 billion KRW, which are increases of 5.5% and 13.7%, respectively, compared to this year.