[Asia Economy Reporter Hyungsoo Park] Kencoa Aerospace is showing strong performance. It appears that rising expectations for aerospace-related stocks are influencing the stock price.
As of 1:02 PM on the 21st, Kencoa Aerospace is trading at 13,050 KRW, up 12.5% from the previous day.
Seungjin Park, a researcher at Hana Financial Investment, explained, "The most notable asset manager in the overseas ETF market is ARK Invest, led by Cathie Wood," adding, "ARK has submitted a listing plan for a 'Space Exploration' ETF to the U.S. Securities and Exchange Commission (SEC)."
He continued, "This is also a background for actual supply and demand to follow," noting, "The aerospace industry is recognized as a next-generation innovative industry by major advanced countries including the U.S., which are expanding their investments."
Furthermore, he emphasized, "Domestically, it has been selected as one of the six future promising new technologies (6T), and investment scale is increasing," adding, "The advancement of aerospace industry technology can be applied in various fields, creating significant synergy effects."
Kencoa Aerospace recently secured an initial order worth 1.3 million USD (approximately 1.4 billion KRW) from Boeing in the U.S. for the SLS (Space Launch System) launch vehicle. They received the contract advance payment in December last year and have started production. Following the initial order, the order amount for the same project is expected to expand to over 5 million USD (approximately 5.5 billion KRW) in the future.
NASA plans to invest 28 billion USD (32 trillion KRW) over four years in the Artemis project, a manned lunar exploration project. Boeing Space is responsible for the SLS launch vehicle segment, Lockheed manufactures the exploration spacecraft, and Northrop Grumman produces the auxiliary propulsion rockets.
Kencoa Aerospace is responsible for producing detailed parts such as the Intertank and engine section of the launch vehicle, as well as the Slosh Baffle tank control device. California Metal, a Kencoa group company that supplies special space materials to NASA, SpaceX, and Blue Origin, is in charge of supplying raw materials for this project. Synergy among affiliated companies is expected to be maximized.
With raw materials supplied by the group company and production handled by Kencoa USA, all of Kencoa’s U.S. affiliates are participating in the space industry. According to the company, Kencoa is the only domestic company generating sales from NASA Artemis launch vehicle-related projects.
California Metal currently supplies special space industry raw materials to over 30 companies in the space sector, including NASA and SpaceX. Sales related to the space industry have been actively generated since 2018. The proportion of consolidated sales from the early stages of the business was 1%, and it is expected to grow to over 10% this year. As the U.S. space industry is explosively growing, the supply chain is currently being formed, and sales to the launch vehicle supply chain are increasing.
Based on this order, Kencoa is currently preparing a quotation after being invited to participate in the launch vehicle mass production project by Blue Origin, an Amazon-affiliated space company, raising expectations for additional orders.
Min-kyu Lee, CEO of Kencoa, stated, "With the advent of the private space era, the space industry market size is expected to grow to 1 trillion USD (1,100 trillion KRW) over the next 10 years," adding, "Kencoa has entered the manufacturing sector of the U.S. market, which holds the largest share of the global space industry market, and is recording sales."
He also added, "Kencoa is the only domestic company that not only directly trades with NASA but also deals with private space companies such as Lockheed, Boeing, Northrop, SpaceX, Blue Origin, and Virgin Galactic, which are existing leaders in the space industry," emphasizing, "Supported by market growth, related order amounts are rapidly increasing."
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