Dayang Metal Expands Supply of New Products to LG... "Positive Signal for Performance Growth"

[Asia Economy Reporter Yoo Hyun-seok] Daeyang Metal announced on the 12th that it will actively proceed with the expansion and relocation of its Southern Branch Office to supply new volumes to LG Electronics and enhance its ability to meet client delivery deadlines. To this end, it decided on the 9th to issue convertible bonds (CB) worth 8 billion KRW.

Of the funds raised this time, Daeyang Metal plans to use 5 billion KRW as facility funds for the expansion and relocation of the Southern Branch Office, and 3 billion KRW as working capital for securing raw materials and the liquefied hydrogen business.

Significant growth in scale as well as a substantial increase in profitability are expected through the expansion and relocation of the Southern Branch Office. The Southern Branch Office plans to expand its equipment facilities and production capacity to supply new volumes for LG Electronics' new dishwasher products and clients in the Yeongnam region.

Recently, the steel industry has been showing favorable conditions due to a combination of factors such as rising raw material prices like iron ore, China's steel production cut policies, easing of oversupply due to the abolition of export VAT refunds, and global steel demand recovery following the expansion of COVID-19 vaccine distribution.

Daeyang Metal's operating profit and net profit in the first quarter increased by 85.5% and 93.9%, respectively, compared to the same period last year, driven by the steel market recovery and price increases due to China's production cuts. Additional sales growth and profit improvement are expected in the second quarter and the second half of the year due to favorable conditions in downstream businesses and expansion of new product supply. Since April this year, Daeyang Metal has shown remarkable performance improvements through the development of new products for home appliances such as dryers, heat exchangers, and dishwashers.

A company official said, "Following the strong performance in the first quarter, good results are expected in the second quarter as well. Through the expansion and relocation of the Southern Branch Office, we anticipate visible sales growth as well as a significant increase in profitability. With the continuous demand for CAPA expansion due to increased domestic and global supply volumes from major large home appliance clients, we plan to sustain meaningful performance growth by expanding market competitiveness through this facility expansion."

He added, "Along with stable growth in our core business, we plan to create synergy in the new liquefied hydrogen business. As the second largest shareholder and collaborative partner of Hylium, which independently developed the world's first mobile liquefied hydrogen refueling station, liquefied hydrogen tank technology, and liquefied hydrogen drones, we expect tangible results in the liquefied hydrogen sector as well."

On the 9th, Daeyang Metal signed a memorandum of understanding (MOU) with Hylium Industry for comprehensive hydrogen business cooperation, including mass production of liquefied hydrogen. Daeyang Metal plans to start cooperation by utilizing its existing stainless steel thin plate products to manufacture Hylium's lightweight drone liquefied hydrogen tanks and expand mutual cooperation areas.