[Click eStock] "CS Wind, US Investment Projects 1 Trillion KRW Sales Within 4 Years"

Expansion of Offshore and Onshore Wind Tower Factory in the US
Securing Market Share Amid Supply Shortage... "Only Growth Remains"

[Asia Economy Reporter Minwoo Lee] CS Wind has officially announced its entry into the U.S. market. With the Biden administration's policies expected to more than double the U.S. wind power market compared to before, the outlook is positive.

On the 23rd, Eugene Investment & Securities maintained a 'Buy' rating and a target price of 150,000 KRW for CS Wind. The previous trading day's closing price was 126,000 KRW. The U.S. market entry is expected to be a significant positive catalyst.

CS Wind plans to establish an offshore wind tower factory on the U.S. Northeast coast and set up an onshore wind tower factory in the central region. To this end, it also announced a paid-in capital increase worth 350.3 billion KRW. This move is seen as a swift response to customer demands.

With the election of Biden, the Democratic presidential candidate, the U.S. wind power market is estimated to see installation demand increase by more than double compared to before. The Production Tax Credit (PTC) for onshore wind and the Investment Tax Credit (ITC) for offshore wind are expected to be reinstated or introduced. Power companies must focus on installing wind and solar power to achieve 100% carbon emission zero by 2035. More importantly, Biden is emphasizing the 'Buy American' policy. Job creation will inevitably be one of the top priorities for the next election as well.

Researcher Byunghwa Han of Eugene Investment & Securities explained, "Top turbine makers in the U.S. market such as GE, Siemens, and Nordex all want to manufacture U.S.-made towers, and CS Wind has proactively responded to customer demands," adding, "Expansion in the U.S. market means growth."

This investment is evaluated to have significantly reduced uncertainties regarding the stock price. The biggest investment risk for CS Wind was the U.S. trade barriers. To avoid this, the company diversified its factories to Vietnam, Malaysia, and other locations, but this was not a fundamental solution. Until now, CS Wind hesitated to build factories in the U.S. due to unstable demand, but with the Biden administration, the U.S. wind market has shifted to worrying about supply capacity rather than demand. With its U.S. entry, CS Wind becomes almost the only wind tower company not exposed to trade barrier risks, as it secures production bases in Europe, Asia, and the U.S.

Researcher Han projected, "Once two factories are secured in the U.S., sales of 500 billion to 1 trillion KRW will be generated within 3 to 4 years," and added, "Although this paid-in capital increase will dilute earnings per share (EPS) by 22%, the improvement in performance is expected to more than compensate for this."