Samyoung M-Tech "Expecting Benefits from Government's SOC Budget Expansion"

[Asia Economy Reporter Hyunseok Yoo] Samyoung M-Tech announced on the 19th that it is expected to benefit from the government's expansion of the SOC (Social Overhead Capital) budget.

According to related industries, this year's Ministry of Land, Infrastructure and Transport budget was finalized at 50.1 trillion KRW (total expenditure basis), a 16.0% increase compared to last year's 43.2 trillion KRW. Among this, the government's total SOC budget increased for the second consecutive year to 23.2 trillion KRW, up 17.6% from last year's 19.8 trillion KRW, with a particular focus on projects aimed at regional balanced development and improving transportation services.

In particular, this year’s new projects appear to allocate significant budgets for road construction (25 sites, 95.1 billion KRW) and railway construction (12 sites, 93.9 billion KRW). Additionally, the 'National Balanced Development Project (15 pre-feasibility exemption projects)' announced last January also included a budget of 188.3 billion KRW for projects such as the ‘Southern Inland Railway (new construction)’.

Samyoung M-Tech mainly produces and supplies seismic isolation and seismic-resistant bearing products installed under bridges, which are essential for road construction. Representative products include LRB bearings, elastomeric bearings, and spherical bearings. The seismic-resistant factory, with an annual production capacity of 20,000 units, has an 'integrated production system' covering everything from design, molding, painting, assembly, performance testing, to installation. In addition to bridge bearing products, the company also produces tower saddles and cable clamps, which are the only suspension bridge structural components manufactured domestically. Furthermore, it operates a seismic division producing internal seismic bearings and a materials division producing core steel structures for ship engines, plant equipment, and industries such as shipbuilding, steel, and power generation.

A company official stated, "This year, the domestic market for the seismic division plans to expand the supply of bridge bearings, which are excellent government procurement products, to sites such as the Hamyang-Ulsan Expressway and Dodam-Yeongcheon double-track railway, following the expansion of the government’s SOC budget." He added, "We also plan to actively secure orders for newly mentioned road construction sites." He further noted, "For overseas markets, we expect sales growth of over 30% compared to last year through the discovery of new trading partners in Indonesia, Myanmar, and the United States."

Meanwhile, Samyoung M-Tech announced on the 13th that it recorded consolidated sales of 69.8 billion KRW, operating profit of 3.1 billion KRW, and net profit of 3.5 billion KRW. Compared to the previous year, sales increased by 1.1%, operating profit by 270.2%, and net profit by 175.5%. A company representative explained, "Last year's performance saw a slight increase in sales due to a downturn in some upstream industries, but profitability such as operating profit improved significantly through increased production of engine equipment due to the rise in eco-friendly shipbuilding volume, sales recognition of plant equipment and structural steel products (domestic steel products for overseas suspension bridges), and company-wide cost reduction activities."

Additionally, as part of its shareholder-friendly policy, Samyoung M-Tech has paid dividends for four consecutive fiscal years. Notably, for last fiscal year, it announced on the 13th that it would implement differentiated dividends. The resolution was 50 KRW for major shareholders and related parties, and 100 KRW for minority shareholders, with a dividend yield of 2.7% based on market price.