Rising Expectations for 'Dong Sung Fine Tech' Amid Overflowing Order Backlog

[Asia Economy Reporter Yoo Hyun-seok] Expectations for performance improvement of Dongsung FineTec are rising. This is because the backlog of orders exceeds 900 billion KRW due to an increase in orders for LNG-powered ships.

According to the financial investment industry on the 27th, Dongsung FineTec's order backlog as of the third quarter is 959.1 billion KRW.

Researcher Eom Kyung-ah of Shin Young Securities said, "Considering that the order backlog was maintained at the 400 to 500 billion KRW level, this is a remarkable level-up," adding, "The order backlog increased from over 200 billion KRW in 2018, over 400 billion KRW in 2019, over 500 billion KRW in 2020, and recently exceeded 900 billion KRW."

Researcher Eom stated, "As the LNG ship price, which had not moved for a long time, improved from 180 million USD to 200 million USD, it is judged that the new orders for insulation materials in 2021 began to pass on the price to consumers," and added, "Last year, benefiting greatly from the decline in insulation material prices due to the low oil price phase in 2020, the oil price is rebounding again with movements such as the resumption of aircraft operations, so in 2021, operating margins showed a quarterly decline."

However, operating profit is expected to improve next year. Shin Young Securities forecast that Dongsung FineTec's sales and operating profit will record 35.3 billion KRW and 3.2 billion KRW this year, and achieve 37 billion KRW and 3.4 billion KRW next year. He emphasized, "It is judged that sales recognition of the manufacturing volume with product price increases will begin in the first half of next year," and "The investment opinion is maintained as 'buy' and the target stock price is raised to 13,000 KRW."