[Click eStock] "G2 Power Expected to Benefit from Renewable Energy Growth"

Daishin Securities Report

[Asia Economy Reporter Minji Lee] Daishin Securities stated on the 21st that G2 Power, which is scheduled for a new listing, is expected to see performance growth due to the increase in renewable energy power generation.

G2 Power is the number one company in the domestic public sector market for switchgear panels. Switchgear panels refer to power systems that convert high-voltage electricity into low-voltage electricity and distribute it to usage sites. As of the third quarter of last year, its market share reached 7%. The company also operates other businesses, with sales proportions of switchgear panels (63%), solar power generation systems (26.7%), inverters (7.9%), and ESS (1.6%).

G2 Power is expected to experience growth due to the increase in renewable energy power generation. Currently, the government plans to expand the proportion of renewable energy power generation to 20% by 2030. It plans to expand renewable energy facility capacity to 36.5GW for solar power and 17.8GW for wind power.

Researcher Sera Park of Daishin Securities said, “The proportion of public sector contracts among the company's total contract volume for switchgear panels and solar power generation devices is 96% and 98%, respectively,” adding, “Since switchgear panels and inverters are inevitably included in solar and wind power generation, an increase in demand for switchgear panels and inverters from public institutions is also expected in the future.”

Last year, G2 Power's sales amounted to 37 billion KRW, and operating profit was 3.8 billion KRW, estimated to have grown by 27% and 27.5% respectively compared to the previous year. G2 Power's public offering price range is 13,500 KRW to 16,400 KRW, and based on the existing public offering price, the expected market capitalization is between 49.77 billion KRW and 60.46 billion KRW. Applying this year's expected EPS (752.7 KRW), the price-earnings ratio (PER) is 17.9 to 21.8 times, which is a discounted level compared to the PER of similar domestic companies (22.45 times).