[Click eStock] "Seojin System, Balanced Growth Across All Business Divisions"

[Asia Economy Reporter Hyungsoo Park] FS Research forecasted on the 10th that Seojin System will continue to grow through customer diversification.

Researcher Lee Dan of FS Research stated, "We expect Seojin System's performance this year to improve more than initially anticipated," adding, "Sales will increase significantly as new orders from Samsung Electronics rise in the telecommunications equipment division and new parts are developed for Ericsson."

He explained, "Sales, which were 139 billion KRW last year, are expected to exceed 300 billion KRW this year," and added, "The ESS parts business, which is the second largest in sales proportion, will also grow."

Furthermore, he analyzed, "Orders from Fluence, which recorded 110 billion KRW in sales last year, have increased by more than 1.5 times this year," and "Sales to Samsung SDI, which sharply declined domestically due to last year's ESS fire incident, are expected to recover to 2020 levels."

Researcher Lee emphasized, "Fluence Energy operates an integrated solution business that provides solar design and overall operation programs," adding, "This means that capacity is set during the design phase." He also noted, "Unless the power plant capacity changes due to design modifications, the sales can be recognized definitively," and added, "We expect the ESS parts division to record 190 billion KRW this year, combining 160 billion KRW from Fluence and 30 billion KRW from Samsung SDI."

He explained, "Seojin System expanded its semiconductor equipment production facilities at the Hwaseong plant in the first half of last year and additionally expanded a 1,000-pyeong building in the third quarter," adding, "This was prompted by Lam Research, the main customer, proposing expansion to supply 2 to 3 times the volume compared to last year."

Researcher Lee said, "In January, Lam Research employees visited the Gumi plant and completed a line tour," and judged, "full-scale orders are expected to begin from the second quarter of this year." Sales in the semiconductor equipment sector are estimated to increase from 70.9 billion KRW last year to about 200 billion KRW this year.

With all business divisions growing evenly, sales this year are expected to reach 1.1171 trillion KRW, and operating profit 102.7 billion KRW. These represent increases of 84.3% and 77.0%, respectively, compared to last year. The amount of convertible bonds (CB) issued so far is 398 billion KRW, which is about 60.0% of the market capitalization. Researcher Lee advised that there could be issues related to stock dilution or overhang.