SangA Frontec, Equipment Sales Gain Momentum in Second Half... Battery Sector Expected to Grow Next Year

Eugene Investment & Securities Report, Target Price Raised by 10%

[Asia Economy Reporter Minji Lee] There are opinions that Sanga Front Tech will improve its performance in the second half of the year due to an increase in equipment sales. Accordingly, Eugene Investment & Securities maintained a buy rating on Sanga Front Tech on the 31st and raised the target price by 10% from the previous level to 22,000 KRW.

Sales in the display equipment sector are expected to accelerate from the third quarter. The display equipment sector shows differences depending on orders and delivery schedules. Considering that equipment sales, which were concentrated in the first half of last year, will be in full swing from the third quarter of this year, performance improvement in the second half is anticipated.

Researcher Byunghwa Han of Eugene Investment & Securities said, “Sanga Front Tech has a diverse sales portfolio including materials and equipment as well as battery components,” adding, “Since it manufactures various components, materials, and equipment based on fluorine, it is judged to have many growth drivers.”

Sanga Front Tech’s sales related to electric vehicle batteries are expected to accelerate from the second half of next year. So far, the company’s growth in electric vehicle battery-related sales has been lower than that of other companies. The main reason is that investments were not made alongside the expansion of the customer Samsung SDI’s factory in Hungary.

At the end of last year, Sanga Front Tech established a Hungarian subsidiary and recently secured a factory site, planning to proceed with expansion investments from the second half of this year. If the factory and customer certifications are completed, battery sales to Europe are expected to accelerate from the second half of next year.

Researcher Han said, “The PTEE membrane business will be another profit growth driver starting next year,” explaining, “Since it is a business structure with limited competition and technology-intensive, its potential is expected to be large.”