Holds Over 30 Related Patents‥Leading Nuclear Power Company
Responsible for Regular Inspection and Maintenance of All Domestic Nuclear Power Plants
Growing Decommissioning Market Due to Aging Nuclear Plants, Focused on Technology Development
Consistent Operating Profit, Exceeded 10 Billion KRW Last Year
With the election of Yoon Seok-yeol of the People Power Party as the 20th president, significant changes are expected in nuclear power policies. President-elect Yoon has pledged to abandon the previous government's nuclear phase-out policy and to build new nuclear power plants, marking a complete reversal of the existing policy. The core plan is to rebuild halted nuclear plants and maintain the share of nuclear power generation at around 30%. After taking office, President-elect Yoon is expected to prioritize restarting construction of Shin Hanul Units 3 and 4, review the reactivation of Wolseong Unit 1, and extend the lifespan of existing nuclear plants. Expansion of overseas nuclear power exports and development of small modular reactors are also expected to be concretized. The market is already seeing fluctuations in the stock prices of nuclear-related companies. It is anticipated that increased orders for nuclear-related projects will significantly impact corporate earnings. Asia Economy analyzed Korea Plant Service & Engineering (KPS) and OrbiTech among the companies benefiting from nuclear power.
[Asia Economy Reporter Park So-yeon] OrbiTech is a leading nuclear power specialist company holding about 30 patents related to radiation management. It is responsible for radiation management to maintain the integrity of nuclear power plants, evaluating radiation exposure for radiation workers, and handling nuclear facilities and waste disposal. The company has built its expertise over more than 10 years by managing radiation and conducting in-service inspections at nuclear power plants.
Services related to nuclear power plant operations require strict qualification criteria, know-how, and specialized personnel, creating very high entry barriers. OrbiTech is responsible for regular inspections and maintenance of all 24 domestic nuclear power plants.
If President-elect Yoon abolishes the 'nuclear phase-out policy' and resumes construction of suspended nuclear plants, demand for radiation management services and related fields is expected to increase. As the operating years of existing nuclear plants increase, services related to radiation, such as equipment aging and increased radioactive waste generation, will inevitably rise. Due to growing concerns about nuclear safety following the Fukushima nuclear accident and environmental issues, nuclear safety has become a more prominent issue, creating a very favorable environment for OrbiTech. Major clients include Korea Hydro & Nuclear Power and Doosan Heavy Industries & Construction.
As of the end of Q3 2021, OrbiTech recorded order backlogs worth 24.9 billion KRW in its nuclear business division managing radiation at nuclear power plants, and 4 billion KRW in its ISI (In-Service Inspection) division diagnosing the integrity of power plants. Last year, the company secured the largest order volume since starting its nuclear business.
It signed a radiation management service contract worth 8.745 billion KRW for planned preventive maintenance at all nuclear plants with Korea Hydro & Nuclear Power. Thanks to this large-scale order, the company achieved its highest performance since establishment last year. Consolidated sales reached 78 billion KRW, a 46% increase from the previous year, surpassing the previous highest sales of 74.9 billion KRW achieved in 2019. Operating profit was 10.1 billion KRW, and net profit was 8.7 billion KRW.
Over the past five years, sales have been maintained between 40 billion and 70 billion KRW. Operating profit, excluding a loss in 2020, consistently ranged between 3 billion and 4 billion KRW, but surged past 10 billion KRW last year. Interest-bearing debt slightly increased from 33.3 billion KRW at the end of 2020 to 36 billion KRW as of Q3 2021. The debt ratio also rose from 112.8% at the end of 2020 to 126.38% as of Q3 2021.
The upcoming five years under the new government will serve as a 'warming-up' period for OrbiTech to develop new business technologies. The company is developing technologies to preemptively enter the emerging large-scale nuclear decommissioning market. To enter this market, it must develop technologies for reducing the radioactive toxicity and volume of spent nuclear fuel, as well as permanent disposal technologies that isolate waste from the environment.
As aging nuclear power plants increase, the nuclear decommissioning market is rapidly expanding, but it will take time for the technology to mature. There was a risk that before nuclear decommissioning technologies and markets fully matured, the company could face a sharp drop in orders due to the nuclear phase-out policy despite having advanced technology. However, with the shift in nuclear policy, OrbiTech will gain time to enhance its technological capabilities.
Besides the nuclear business, OrbiTech has also entered the aircraft precision parts manufacturing industry since 2013. It has obtained the AS9100 international quality certification essential for the aerospace industry. The company has quickly secured independent production capabilities through new factory completion and technology transfer, gaining recognition for its technological prowess and competitiveness. It supplies key structural components such as bulkhead assemblies and precision machined parts for the tail fuselage of the Boeing B737.
OrbiTech holds a 99.03% stake in Orbit Partners, an unlisted new technology business finance company. Other affiliates include Quantec (26.87%), a fintech company related to robo-advisors, and Vegas (8.11%), a data analysis consulting firm specializing in artificial intelligence (AI) and big data.
The largest shareholder changed from Astro Co., Ltd. to Sungjin Holdings Co., Ltd. in January last year, holding a 15.35% stake. Sungjin Holdings is a small and medium-sized enterprise established in August 2019, engaged in corporate advisory and consulting services.
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