[Special Stock] Sinseong Delta, Supernova in Secondary Battery Parts Industry... Rapid Increase in Orders from LG Energy Solution

[Asia Economy Reporter Park Hyungsoo] The stock price of Sinseong Delta Tech is on the rise. It appears that securities firms' analysis suggesting that the company should be evaluated as a secondary battery parts supplier rather than a home appliance parts supplier is influencing the stock price.

As of 2:14 PM on the 9th, Sinseong Delta Tech is trading at 18,150 KRW, up 11.69% from the previous trading day.

Kiwoom Securities estimated that Sinseong Delta Tech will achieve sales of 757.8 billion KRW and operating profit of 45.5 billion KRW this year. This represents an increase of 53.7% and 239.6% respectively compared to last year.

Researcher Kim Doohyun of Kiwoom Securities analyzed, "Performance is expected to improve due to increased orders in the secondary battery sector, recovery of export volumes in the home appliance parts sector, new product deliveries, and expansion of business areas in logistics."

He added, "The contribution of the secondary battery sector to Sinseong Delta Tech's operating profit is expected to exceed 30%. It is time to re-evaluate the corporate value from the price-earnings ratio (PER) of the home appliance industry to that of the secondary battery industry."

Researcher Kim emphasized, "Sinseong Delta Tech supplies secondary battery parts to LG Energy Solution through its consolidated subsidiaries Sinseong Automotive and Sinseong ST. Since the first quarter of this year, synergy effects have been fully realized as Sinseong ST was included as a consolidated subsidiary." He also noted that secondary battery sales are expected to exceed 200 billion KRW due to increased orders from LG Energy Solution.

Kiwoom Securities set the target stock price for Sinseong Delta Tech at 30,600 KRW.

Researcher Han Byunghwa of Eugene Investment & Securities explained, "U.S. President Joe Biden announced an executive order with major U.S. automakers to set the electric vehicle sales ratio for new cars at 50% by 2030. As of 2020, the electric vehicle sales ratio in the U.S. was only 2%."

He added, "To achieve the Biden administration's goal, the U.S. electric vehicle market must continue to grow at an average annual sales increase of over 40%."