[Asia Economy Reporter Yoo Hyun-seok] CentralMotec's stock price is soaring. Amid growing interest in electric vehicle parts suppliers in the domestic stock market, the company's stock price appears to be influenced by rising expectations for overseas exports as it is the first domestic manufacturer of aluminum control arms.
As of 2:25 PM on the 12th, CentralMotec was trading at 31,250 KRW, up 22.55% (5,750 KRW) compared to the previous trading day.
CentralMotec operates production facilities at its Ulsan plant (headquarters), Seosan plant, and Miryang plant. Its subsidiary, Central DTS, owns a plant in Daegu. The company supplies drive components such as inner races, OD clutch bosses, and ball screws, as well as suspension components including control arms and axles, and propeller shafts from its subsidiary to major clients including Hyundai Motor Group, automotive parts companies, and overseas automakers.
Among the suspension parts produced, the control arm is made of aluminum, a non-ferrous metal with a higher specific strength compared to steel, representing a key vehicle lightweighting component. CentralMotec’s aluminum control arm, developed domestically for the first time, boasts the largest production facility in Korea. In addition to Hyundai Motor Group, it supplies overseas automakers through affiliated companies.
Yuanta Securities introduced CentralMotec’s control arm as a component connecting the vehicle body and wheels, currently supplied to domestic automakers. It added that based on its domestic automaker supply track record, the company is expanding its overseas client base to secure mid- to long-term growth drivers.
In the first half of this year, the company recorded sales of 183.9 billion KRW and an operating profit of 6.5 billion KRW, increasing by 29.5% and 104.9% respectively compared to the same period last year.
CentralMotec was the first in Korea to domestically produce ball screws for automobiles and supplies them to domestic and international automakers and automotive parts companies. Since a German automotive parts company currently monopolizes the domestic market, CentralMotec plans to increase its market share through price competitiveness based on equivalent quality and performance. It conducted preliminary research on ball screws from 2011 to 2017.
Starting with a ball screw supply contract for transmission gear actuators in 2018, CentralMotec is sequentially implementing a three-stage roadmap to expand its ball screw business through 2025. The first stage involves developing six types of automotive transmission parts used in eco-friendly electric vehicle drive units by next year, systematically accumulating technological capabilities in design, analysis, processing, measurement, performance and reliability verification, and quality control, and proceeding with mass production step by step. The second stage plans to establish processes and core technology standardization capable of promptly responding to customer specifications to expand the ball screw business area based on accumulated technological capabilities. Expansion into steering, braking, and suspension fields is planned. The third stage aims to strengthen profitability of ball screws by researching and developing ball screw modularization and systems, advancing into suspension devices such as electric dampers, as well as human robots and aerospace sectors.
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