[Click eStock] "Seojin System, 3Q Earnings Exceed Consensus"

Balanced Growth Across Businesses... Increased Performance Expectations for Next Year
SK Securities "Maintains Seojin System Target Price at 51,000 Won"

[Asia Economy Reporter Gong Byung-sun] Seojin System posted third-quarter earnings this year that exceeded market consensus. Thanks to balanced growth across various business sectors, including the energy storage system (ESS) division, earnings are expected to rise again next year.

According to SK Securities on the 17th, Seojin System's third-quarter sales this year reached 173.6 billion KRW, up 101.7% compared to the same period last year, and operating profit turned positive to 25 billion KRW during the same period. These figures exceeded consensus by 0.45% and 33.87%, respectively.

Balanced growth across each business division had a positive impact. Front industries in sectors such as ESS, home appliances, and telecommunications equipment all showed steady sales. Additionally, the operating rate of the Vietnam factory quickly recovered. Until the second quarter of this year, factory operations were disrupted due to the spread of COVID-19 in the Vietnam region. However, the operating rate was raised thanks to increased vaccination rates within Vietnam and strengthened in-house quarantine measures.

(Provided by SK Securities)

Expectations for next year's performance are also growing. 'Fluence Energy,' considered a key client of Seojin System, plans to conduct aggressive marketing in line with the growth of the global ESS market. Benefiting from this marketing, Seojin System's ESS division sales are also expected to rise.

The telecommunications equipment division is also establishing itself as a core contract manufacturing partner for its clients. Since the second half of this year, new sales have been generated with global telecommunications equipment companies such as Ericsson and Fujitsu. Na Seung-doo, a researcher at SK Securities, explained, “The possibility of contract manufacturing of key components due to changes in smartphone forms and the timing of mass production sales of parts related to electric vehicle batteries are also imminent. Along with balanced growth across each business division, we have entered a phase where profit levels are fundamentally changing.”

Accordingly, SK Securities maintained its investment opinion of 'Buy' on Seojin System with a target price of 51,000 KRW. The closing price on the previous day was 38,200 KRW.