[Post-IPO] NCS, Expected Changes in the Second Year After Listing

Stock Price Sluggish Due to High Expectations at IPO
Sales Growth Trend Expected to Continue... Expansion Effects Anticipated

[Asia Economy Reporter Hyungsoo Park] NCS, which was listed on the KOSDAQ market last April, is expected to improve its performance this year based on expansion investments.

According to the financial investment industry on the 11th, NCS recorded sales of 42.7 billion KRW and operating profit of 7.7 billion KRW last year. Sales increased by 17.3% compared to the previous year, and operating profit rose by 3.8%. Net profit increased by 34.5% to 4.8 billion KRW.

The company explained that the order amount increased by 67% compared to the previous year as secondary battery manufacturers aggressively expanded capacity last year. Due to the rise in exchange rates, foreign currency valuation gains increased, and interest expenses decreased due to debt repayment, resulting in a significant increase in net profit for the period.

NCS is a vision inspection equipment company. It supplies inspection equipment necessary for all processes of secondary batteries, from electrode processing to module and pack processes. Major clients include LG Energy Solution and Samsung SDI.

At the time of listing, the financial investment industry expected NCS to grow rapidly. As the secondary battery demand exploded due to the expansion of the front market and the importance of inspection equipment increased following electric vehicle battery fire incidents. SK Securities estimated in a report after NCS’s listing that sales would reach 55 billion KRW and operating profit 12.1 billion KRW. However, as quarterly results were announced, expectations gradually lowered. The stock price, which had traded at a premium compared to the industry average, fell to the IPO price level. Although it rose to 44,100 KRW on the first day of listing, the recent stock price has fallen below the IPO price of 19,000 KRW. Early this year, with expectations for growth in the secondary battery market, NCS’s stock price showed a rebound trend, but it has continued a weak trend again due to the sharp rise in nickel prices.

Although NCS’s performance and stock price were sluggish last year, there are forecasts that this year will be different. Researcher Jongseon Park of Eugene Investment & Securities said, "We are pursuing customer diversification as well as existing major clients," adding, "We are also working on supplying to electric vehicle manufacturers." He continued, "We will strengthen the lineup and increase sales through additional development of equipment for each process."

Expansion investments are continuing in preparation for increased orders. NCS, which raised 30.7 billion KRW through its IPO, has started expansion investments to respond to increasing orders. It purchased new land and began constructing a factory. Production capacity is being increased to three times the existing scale.

Eugene Investment & Securities estimates that NCS will achieve sales of 57.5 billion KRW and operating profit of 12.6 billion KRW this year.