[Funding] Estraffic Raises 15.5 Billion KRW to Expand Electric Charging Business

[Asia Economy Reporter Hyunseok Yoo] Estraffic is raising approximately 15.5 billion KRW to expand its electric vehicle charging station infrastructure.

According to the Financial Supervisory Service's electronic disclosure system (DART) on the 19th, Estraffic announced on the 14th that it will conduct a paid-in capital increase of 15.484 billion KRW through a rights offering followed by a general public offering of forfeited shares. The planned issue price is 5,530 KRW per share.

All funds raised will be invested in electric vehicle charging infrastructure. Estraffic started this business in 2017. It currently operates a total of 2,176 electric vehicle chargers, including 319 units of 100kW ultra-fast chargers, 330 units of 50kW fast chargers, and 1,527 units of slow chargers. Recently, the company has strengthened its business by launching a subscription-based electric vehicle charging product called 'Lucky Pass.'

Specifically, next year, Estraffic plans to install a total of 4,390 electric vehicle charging stations at supermarkets, department stores, apartments, and government offices. The total expected cost is 19 billion KRW. Of this, 15.1 billion KRW will be raised through the paid-in capital increase, and the remainder will be funded by the company’s own capital.

Through this, by 2025, Estraffic aims to secure 52,000 slow chargers and 3,000 fast charging infrastructures through its own investments and government subsidy-linked projects. Additionally, it expects to add approximately 2,000 units if private sector transfer of chargers built under the Ministry of Environment’s projects occurs.

The company expects that if the business proceeds as planned, it can expand its domestic charging infrastructure market share (M/S) to 35% by 2025. An Estraffic official explained, "The 35% figure was calculated considering the number of electric vehicles in use, charging unit prices, and charging turnover rates," adding, "Since more electric vehicles are expected to be released by automakers next year, the demand for electric vehicle charging is expected to increase, which is why we decided to proceed with this paid-in capital increase."

However, there are criticisms that investors lack sufficient information to verify this business. Estraffic is a transportation-related SI (System Integration) specialized company. Its business is broadly divided into road sectors such as Intelligent Transportation Systems (ITS) and Smart Tolling, and railway sectors including train signaling and communications.

The electric vehicle charging station business falls under the road sector. However, related performance information cannot be found in the business report or the securities registration statement for the paid-in capital increase. In other words, despite stating that a large amount of funds will be invested in the electric vehicle charging station business, there is no available past sales or profitability data to forecast future performance. This lack of information is why there are concerns about insufficient data for participating in the paid-in capital increase.

Nonetheless, Estraffic emphasizes that meaningful figures are emerging in this business. A company representative stated, "Currently, the electric vehicle charging industry is undergoing mergers and acquisitions, so we are not disclosing sales figures," but added, "However, charging sales have shown significant growth this year." They further noted, "Compared to the early stages of the business, there has been substantial growth both in absolute amounts and ratios."