[Click eStock] "Dong-A Hwasung Expected to Benefit from High Growth in Electric and Hydrogen Vehicle Markets"

[Asia Economy Reporter Yoo Hyun-seok] SK Securities analyzed on the 7th that Donga Hwasung is expected to directly benefit from the high growth of the electric and hydrogen vehicle markets. No investment opinion or target price was provided.

Donga Hwasung is a specialized manufacturer of automotive, home appliance, and industrial special rubber parts. Its main products include automotive gaskets and hoses, as well as gaskets that serve vibration absorption and cushioning functions for drum washing machines.

Seochungwoo, a researcher at SK Securities, said, "The company is diversifying its items in line with the era's shift from conventional internal combustion engine vehicles to eco-friendly vehicle parts," adding, "With the recent rapid growth of the electric vehicle market, benefits are expected from the expansion of investments and capacity (CAPA) by client companies."

He evaluated, "It is understood that Donga Hwasung's electric vehicle gaskets were selected for Hyundai Motor's electric vehicle dedicated platform ‘EGMP’, securing exclusive orders for the required volume until 2022," and "Direct benefits are expected from the almost certain expansion of GM's investments."

Researcher Seo also emphasized the growth potential of the building hydrogen fuel cell system of the subsidiary Donga Fuel Cell. He said, "Donga Fuel Cell's core technology is the 5KW high-temperature polymer electrolyte membrane fuel cell (HT-PEMFC), which was transferred from the high-temperature stack technology of its joint partner, the Korea Institute of Energy Research."

He stressed, "It is expected to receive KS certification within this year and to be commercialized from early next year," adding, "This HT-PEMFC enables trigeneration power generation producing electricity, heating, and cooling, and is understood to have superior economic efficiency and power generation efficiency compared to existing fuel cell systems that supply only electricity and heating. Therefore, investors need to pay attention to the future commercialization and sales trends related to this fuel cell."