Reasons Why NanoCMS Is Expected to Return to Profitability This Year

[Asia Economy Reporter Hyunseok Yoo] NanoCMS is expected to turn a profit this year. It is analyzed that performance will improve due to growth in the trademark protection sector necessary for anti-counterfeiting.

On the 27th, Kiwoom Securities forecasted that NanoCMS will record sales of 9.7 billion KRW and an operating profit of 1.5 billion KRW this year. Sales are expected to increase by 131.0% compared to the previous year, and operating profit will turn positive. The strong performance factors are expected to be influenced by the designation of new pigment outsourcing manufacturers in the currency sector and new orders for nanomaterials in the passport sector.

NanoCMS’s target market is the advanced security printing market, which includes national security printing markets such as banknotes, passports, and identification cards. Kim Doohyun, a researcher at Kiwoom Securities, said, "The security printing market size is expected to grow at an annual average rate of 4%, from about 29 trillion KRW in 2014 to about 41 trillion KRW in 2024. Although a decrease in printing trends is expected in some financial sectors due to increased use of electronic money, the field related to trademark protection necessary for anti-counterfeiting is expected to show high growth at an annual average rate of 13%."

Kiwoom Securities pointed out three investment points for NanoCMS. First, the importance of security materials is increasing due to the increase in high-denomination bills. He said, "As COVID-19 prolongs, the tendency to hold cash is increasing, leading to higher demand for high-denomination bills. The order volume for 50,000 KRW bills is expected to exceed 20 trillion KRW and approach 25 trillion KRW this year, and NanoCMS’s material order volume is also expected to increase."

Along with this, overseas market expansion is also anticipated. He emphasized, "NanoCMS is expected to enter the global market through collaboration with the Korea Minting and Security Printing Corporation, and there is a history of jointly entering overseas national security markets in the past. Last year, two of NanoCMS’s products were adopted in electronic passports in the India region and are being supplied, and plans to expand to banknotes are underway. Vietnam passed sample tests last year and is expected to start mass production this year."

He added, "Lastly, entry into the private security market is expected. Starting with genuine authentication materials for the Guess jeans brand, it is expected to expand to casino chips, pharmaceuticals, cosmetics, and more."