Mplus Expects Record High Performance Next Year with Two Contract Deals

Announcement of 103.3 Billion KRW Order... 107.4 Billion KRW Order Previous Day
Largest Single Contract Ever
Efforts to Diversify Orders... Pilot Orders with Local Companies in the US and Europe

[Asia Economy Reporter Hwang Yoon-joo] M Plus, a KOSDAQ-listed company, has succeeded in securing orders worth over 200 billion won, raising expectations for achieving record-high performance next year.

According to the Financial Supervisory Service's electronic disclosure system on the 22nd, M Plus announced that it signed a contract to supply manufacturing equipment for the secondary battery (battery) assembly process worth 103.4 billion won. This follows a battery supply contract worth 107.4 billion won announced the previous day (21st), totaling 210.8 billion won. The contract sizes correspond to 65% and 67% of recent sales, respectively.

This contract is significant as it is the largest single contract in M Plus's history. With just these two contracts, the possibility of achieving record-high performance next year has increased. The disclosed contract sizes correspond to 65% and 67% of recent sales, respectively. Generally, battery manufacturing equipment takes about one year from order to design, production, and delivery. Therefore, order disclosures are reflected as sales the following year, as sales are recognized only after installation confirmation by the contracting party.

This year's performance is also not bad. According to FnGuide, the estimated sales for 2022 are 198.3 billion won, which is 159.28% higher than last year. Operating profit and net income are expected to record 7.5 billion won and 6.2 billion won, respectively, indicating a turnaround to profitability. This outlook is attributed to expanded orders last year. M Plus previously announced contracts including a supply contract worth 31.1 billion won to BLUE SKY UNITED ENERGY, a joint venture between SK Innovation and China's EVE, and an equipment contract worth 104.3 billion won for a factory in Hungary.

However, M Plus's sales dependence on SK Innovation is a weakness. Although orders were delayed due to the COVID-19 impact, the expansion of the U.S. plant was temporarily suspended due to SK Innovation's lawsuit at the U.S. International Trade Commission (ITC), causing difficulties in securing performance. As a result, M Plus's sales last year were 76.5 billion won, down 51.7% from the previous year, with an operating loss of 14 billion won and a net loss of 8 billion won, turning to a deficit.

M Plus plans to diversify its sales. A company representative said, "We have secured pilot lines from local companies in the U.S. and Europe," adding, "We are making efforts to acquire new customers."