[Featured Stock] T-Plex Gains Growth Drivers Including Small Modular Reactors and Electric Vehicle Battery Modules

[Asia Economy Reporter Hyungsoo Park] T플랙스's stock price is rising. Following a record-high performance in the first half of this year, securities firms' analyses predicting further improvement in future earnings appear to be influencing the stock price.

As of 9:27 AM on the 29th, T플랙스 is trading at 5,270 KRW, up 13.09%.

KB Securities expects T플랙스's strong performance to continue, supported by recovery in front-end industries such as semiconductors, automobiles, LNG ships, and electric vehicles, along with increased orders and rising selling prices.

T플랙스 is a primary metal processing company that was listed on the KOSDAQ market in 2009. It procures raw materials from SeAH Changwon Specialty Steel and supplies products to about 1,500 customers in shipbuilding, semiconductors, and other sectors. It holds the number one market share in the stainless steel bar sector.

Researcher Sang-guk Lim of KB Securities stated, "We focus on a favorable earnings growth cycle driven by increases in stainless steel price (P) and sales volume (Q), as well as cost reductions (C)." He explained, "The rise in nickel prices is leading to an increase in stainless steel selling prices."

He added, "Nickel prices recorded a low of $7,595 per ton in 2016, then rose to an average of $17,606 per ton in the first quarter, and reached $20,091 per ton as of October 26." He emphasized, "Large-scale orders for semiconductor equipment investment and LNG ships are driving increased demand for stainless steel valves and fittings, which is leading to continuous growth in the CD Bar business division."

In the first half of this year, T플랙스 recorded sales of 86.6 billion KRW and operating profit of 6.5 billion KRW, representing increases of 25.1% and 174.3% respectively compared to the same period last year.

Growth in the nuclear power and electric vehicle sectors is also anticipated. He explained, "T플랙스 supplies stainless steel materials for electric vehicle battery module case pillars." He added, "The final customer is a domestic company S (supplying 50 to 100 tons per month)," and noted, "As stainless steel materials are incorporated into electric vehicle battery modules, earnings expansion is expected alongside growth in the electric vehicle market."

He also said, "Stainless steel round bars are used as materials for nuclear power plant valves, including small modular reactors (SMRs)." He expressed expectations, "In the past, T플랙스's main product was stainless steel round bars for nuclear power plant valves, and this could act as a momentum going forward."

Researcher Lim advised that the business structure is sensitive to front-end industries such as automobiles and shipbuilding, and that movements in nickel prices are important.