[Click eStock] "Cowintech, Expected Highest Sales in 2020"

[Asia Economy Reporter Minji Lee] Hana Financial Investment maintained a buy rating and a target price of 43,000 KRW for Cowintech on the 19th, stating that the company’s sales are expected to reach a record high this year considering the growth trend in the secondary battery sector.

Cowintech is projected to record sales and operating profit of 26.2 billion KRW and 5.8 billion KRW respectively in the fourth quarter of last year, representing growth of 2% and 7% compared to the same period the previous year.

Jungki Lee, a researcher at Hana Financial Investment, said, “Despite the fact that Cowintech’s order volume was deferred to this year due to battery yield issues faced by major clients, the company is expected to post solid results,” adding, “The operating profit margin appears to have temporarily declined due to ongoing tests of new unmanned transport equipment with clients.”

Last year, the company’s consolidated sales and operating profit are expected to have reached 91.3 billion KRW and 23.6 billion KRW, marking increases of 18% and 124%, respectively.

This year, Cowintech is expected to achieve sales of 135.4 billion KRW and operating profit of 35.8 billion KRW, representing growth of 48% and 51% compared to last year. Researcher Lee said, “Sales to domestic battery companies are expected to increase, and orders are anticipated to rise due to the resumption of investments in the display industry,” adding, “The company’s expansion into the European market will contribute to its external growth.”

Sales to domestic battery companies this year are estimated to be around 80 billion KRW. With improvements in yield and expansion of small battery production lines by domestic clients, sales are expected to exceed 100 billion KRW.

Sales in the display sector were limited to 3.1 billion KRW in 2019 due to delayed investments by domestic companies, but are expected to grow to 15.5 billion KRW this year with the resumption of investments. In the European market, if orders are secured from European battery companies within the first half of the year, orders could reach up to 30 billion KRW.

The researcher said, “It is time to actively consider purchasing secondary battery equipment,” and added, “The company could record its highest sales ever this year.”