Myeongshin Industry, Will It Break Record High Performance Again This Year Riding on Tesla?

[Asia Economy Reporter Jang Hyowon] Myungshin Industry is expected to break its record high performance again this year, driven by the growth of the US electric vehicle company Tesla.

According to Hanwha Investment & Securities on the 29th, Myungshin Industry is projected to record consolidated sales of 321.1 billion KRW and operating profit of 26.4 billion KRW in the fourth quarter of last year, representing increases of 33.1% and 16.6% respectively compared to the same period last year. Accordingly, net profit is expected to reach 20.8 billion KRW, marking a successful turnaround to profitability.

Junho Park, a researcher at Hanwha Investment & Securities, analyzed, “Considering the record-high quarterly production volume achieved by North American electric vehicle companies, the recovery of HMG production volume compared to the previous quarter, and a favorable exchange rate environment, it is likely that the company succeeded in maintaining an absolute scale of profit.”

Myungshin Industry is a company that manufactures automotive body parts. It is a secondary supplier that delivers lightweight body parts to assembly companies through its core technology, the ‘hot stamping process.’ Its main customers are Hyundai and Kia Motors, and it also sells body parts to partners such as US-based Tesla and China’s BYD.

Myungshin Industry is expected to break its record high performance again this year. Hanwha Investment & Securities forecasts that Myungshin Industry will record sales of 1.4917 trillion KRW and operating profit of 137.1 billion KRW this year, representing increases of 33.0% and 48.8% respectively compared to the previous year.

This is because outperformance in terms of volume is expected again this year, and the sales proportion from Tesla and others is expected to rise, improving profitability. Tesla plans to increase production at its existing plants in California and China this year and to fully operate new plants in Texas and Europe.

Myungshin Industry holds the position of a sole vendor within the US and China plants among these, and it is expected to generate some sales in Europe as well. Accordingly, Myungshin Industry’s volume for Tesla is expected to increase by 55.5% compared to the same period last year.

Researcher Park stated, “Considering the visibility of Myungshin Industry’s profit growth, if additional resolution of overhang (potential backlog volume) is confirmed, a stock price trend based more firmly on fundamentals is expected to emerge.”