[Asia Economy Reporter Jang Hyowon] Attention is being drawn to EN Corporation, which has transformed itself into an eco-friendly waste treatment company by acquiring industrial water treatment company ‘Han Sung Clean Tech’ and liquid waste treatment company ‘Inbiotech’.
Hanyang Securities analyzed on the 22nd that EN Corporation, which has begun to actively enter and expand its eco-friendly business after a change in its largest shareholder, is expected to become a promising eco-friendly company with growth potential. They also predicted that it will grow into a comprehensive environmental/energy company in the future.
According to the Hanyang Securities analysis report, EN Corporation entered the eco-friendly business by acquiring all shares of the industrial water treatment equipment company ‘Han Sung Clean Tech’ on the 19th of last month, and subsequently built an eco-friendly business portfolio by acquiring the Dangjin plant of the liquid waste treatment and wastewater consignment company ‘Inbiotech’ on the 20th.
Han Sung Clean Tech’s main business includes manufacturing ultrapure water and wastewater treatment equipment, achieving an average annual sales growth rate of 14% over the past three years. It holds equipment construction references for semiconductor manufacturers such as Samsung Electronics and SK Hynix, as well as petrochemical and automotive companies. Increased industrial production and strengthened environmental regulations are factors driving demand for equipment.
Kim Yongho, a researcher at Hanyang Securities, explained, “The production facilities and devices for ultrapure water used in semiconductors are highly dependent on Japan, and the government’s intention to localize production is also strong.” He added, “According to media reports at the end of 2019, the Ministry of Environment is promoting the development of ultrapure water localization technology, and it is expected that the project will commence this year.”
Meanwhile, Inbiotech is one of the largest liquid designated waste and wastewater treatment companies nationwide, with strengths in treating high-concentration waste from the semiconductor and display industries. The Dangjin plant accounts for about half of Inbiotech’s total treatment capacity and recorded sales of 19.5 billion KRW last year.
It grew 76% over two years from 2018. Operating profit surged more than tenfold from 200 million KRW to 2.2 billion KRW during the same period, which is attributed to the rise in liquid waste treatment unit prices.
Researcher Kim said, “Due to the nature of waste treatment and wastewater consignment being government-licensed businesses, the number of companies capable of treatment is limited, while wastewater treatment demand is increasing due to industrial production growth in semiconductors and displays.” He explained, “The rise in treatment unit prices is due to this supply-demand imbalance and will contribute to improving the company’s profit margin in the future.”
He continued, “EN Corporation will first enter the industrial water treatment business, then expand to solid waste treatment business as the next step, and later add renewable energy to its business portfolio.”
He concluded, “This means completely moving away from the business of its predecessor ‘Brain Contents’ and reborn as an environmental/energy company.” He added, “If the plan is carried out as targeted, considering business expansion through mergers and acquisitions of related companies, the company is expected to settle on a more stable growth trajectory.”
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