[Featured Stock] EMTEK, 1300x Growth in 6 Years Electronic Cigarettes... Aiming for 'Global Top Tier' Target Price 45,000

[Asia Economy Reporter Hyungsoo Park] EMTEK is showing strong performance. The growth of its electronic cigarette business division appears to have influenced the stock price, supported by securities firms' analysis that its earnings will rapidly improve.

At 10:03 AM, EMTEK is trading at 28,900 KRW, up 15.14% from the previous day.

Researcher Han Kyung-rae from Daishin Securities explained, "Among heated tobacco product manufacturers, only two companies, the global No.1 Smoore and EMTEK, possess in-house technology from design to production."

He added, "While Smoore's 12-month forward price-to-earnings ratio (PER) is 25 times, EMTEK's is only 9 times," and analyzed, "Considering its transformation into a global top-tier manufacturer, it is absolutely undervalued." He set EMTEK's target stock price at 45,000 KRW.

He emphasized, "The heated tobacco product market size has rapidly grown over 1,300 times in six years, from 18 billion KRW in 2014 to about 25 trillion KRW in 2020," and noted, "The penetration rate is still only 2.5%." Furthermore, he added, "The U.S. FDA's approval for heated tobacco product sales and research results from the UK and Germany showing that electronic cigarettes are less harmful than conventional cigarettes will support market growth."

The researcher explained, "It is estimated that EMTEK has started supplying to the global tobacco company BAT based on the certification status from the National Radio Research Agency, following KT&G."

In June, InnoIT received conformity assessment for the heating device model G701. InnoIT is a 100% subsidiary established by EMTEK in November 2020. Both InnoIT and Nicoventures were listed as manufacturers. Nicoventures is a subsidiary of BAT. Last month, BAT launched the Glo Pro Slim model in Korea, and the model certification number matches, the researcher emphasized.

He introduced, "BAT currently aims to increase its non-combustible product customers from 16.1 million to over 50 million by 2030, more than tripling the number, and is strengthening its heated tobacco product lineup." He also added, "Being responsible for producing the flagship products of global major companies will certainly be a factor for revaluation."

BAT's non-combustible next-generation product customers increased by 45%, from 11.1 million at the beginning of last year to 16.1 million in the first half of this year.