[Click eStock] GreenPlus, K-Smart Farm Export to Australia... "Expecting Corporate Value Reassessment"

[Asia Economy Reporter Ji Yeon-jin] KTB Investment & Securities announced on the 11th that it has raised the target price of GreenPlus to 30,000 KRW, citing its successful entry into the Australian and New Zealand markets and expected new entries into the United Arab Emirates (UAE) and Southeast Asia.

GreenPlus has signed an exclusive license agreement for the supply of smart farms in Australia and New Zealand with Farm 4.0, an Australian smart farm specialist company. The contract period is a long-term 10-year agreement with an option for a 20-year extension. Through this contract, GreenPlus will simultaneously provide turnkey construction and license supply of core technologies for the smart farms established by Farm 4.0.

The contract includes a minimum guarantee of a certain scale every year starting from 2021, and the first turnkey smart farm construction in Australia is expected to be reflected in sales within this year. The Australian government is investing about 500 billion KRW annually in agricultural research and development (R&D) to grow its agricultural industry to approximately 80 trillion KRW by 2030. In particular, Australia is implementing smart farm promotion policies as one of the countermeasures against severe drought and climate change.

With successful entry into the Australian and New Zealand markets, the possibility of entering the UAE market is also expected to increase. The company is developing a Middle East-customized greenhouse for the UAE as the lead organization for the Desert Smart Farm demonstration project by the Rural Development Administration. The Middle East market, with a food self-sufficiency rate below 10%, is expected to be a market larger than Australia.

New entry into the Southeast Asian market is also becoming visible. Last month, the government announced agricultural and forestry ODA (Official Development Assistance) to support food security in developing countries. This includes plans to supply smart farms to Indonesia, Vietnam, the Philippines, Cambodia, and Uzbekistan, and GreenPlus has been selected for the Indonesian smart farm ODA national project, with market entry expected in the first half of 2022.

Jae-yoon Kim, a researcher at KTB Investment & Securities, said, "GreenPlus has taken the first step toward becoming a global smart farm company," adding, "Considering that some global smart farm companies target single-country markets, this year's PER (price-earnings ratio) of 26.0 times is significantly undervalued compared to global smart farm companies, so valuation rerating is expected."