[Asia Economy Reporter Hyungsoo Park] CentralMotec is showing strong performance. With the growth of eco-friendly vehicles, securities firms' analysis that CentralMotec is entering a full-fledged growth phase starting this year appears to have influenced the stock price.
As of 11:29 AM on the 12th, CentralMotec is trading at 30,850 KRW, up 7.87% from the previous day.
Yuanta Securities predicted that demand for eco-friendly parts will increase during the paradigm shift in the automotive industry for CentralMotec, a manufacturer of ball screws, a power transmission device for vehicles. Since CentralMotec holds a monopolistic position in its main products, it is expected to benefit significantly.
CentralMotec succeeded in domestic production of the 'ball screw' component for the first time in Korea. A ball screw is a power transmission device that converts rotational motion into linear motion. It is a widely used component regardless of vehicle type.
Researcher Juwon Ahn of Yuanta Securities explained, "The domestic ball screw market has been monopolized by German companies," adding, "CentralMotec is increasing its market share through price competitiveness based on the same quality."
CentralMotec conducted preliminary research on ball screws from 2011 to 2017. Starting with deliveries for transmissions in 2018, it expanded its scope last year to supply ball screws used in reducers for electric vehicles.
Researcher Ahn analyzed, "Expectations are high not only for ball screws but also for aluminum control arm parts," noting, "Demand for these parts is increasing due to vehicle lightweighting." CentralMotec currently supplies aluminum control arms exclusively to Hyundai-Kia Motors and Tesla.
He continued, "CentralMotec has over 15 years of experience in the aluminum field, giving it a technical advantage to supply aluminum control arms exclusively to major domestic clients," and forecasted, "Thanks to the lightweighting trend accompanying eco-friendly movements, future sales growth rates are expected to be positive."
Yuanta Securities estimated that CentralMotec will achieve sales of 358.2 billion KRW and operating profit of 12.5 billion KRW this year, representing increases of 17.6% and 237.2%, respectively, compared to last year.
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