[Featured Stock] KEC, Shortage Drives Up Prices... From Home Appliances to Electric Vehicles, a 'Precious Asset'

[Asia Economy Reporter Hyungsoo Park] KEC is showing strong performance. The sharp increase in operating profit in the first quarter of this year appears to be influencing the stock price as well.

At 10:08 AM on the 20th, KEC was trading at 3,390 KRW, up 8.31% from the previous day.

KEC recorded sales of 72.2 billion KRW and an operating profit of 9 billion KRW in the first quarter of this year. These figures represent increases of 19% and 229%, respectively, compared to the same period last year.

Youngmin Ko, a researcher at Shinhan Financial Investment, explained, "Since the second quarter of last year, a steady performance trend has continued," adding, "thanks to increased supply (M/S) to major domestic home appliance manufacturers."

He continued, "As the chip shortage situation persists, domestic home appliance manufacturers have a growing need to expand their sources for power semiconductors within the country," and added, "Even if demand for home appliances slows down, the growth direction is clear through increased market share within customer companies."

He emphasized, "Considering the rise in raw material prices, selling prices are also increasing," and stated, "There is a clear demand for KEC products within customer companies to the extent that they actively accept the price increases."

He analyzed, "Sales are increasing in tandem with automotive customers," and noted, "It is understood that the supply to China's BYD has been confirmed, and the first order has been received." Furthermore, he emphasized, "It is significant that high-priced IGBT products are being supplied," and added, "Discussions and preparations for supply are also underway with major domestic automotive parts companies and overseas electric vehicle manufacturers."

Researcher Ko said, "The SiC (next-generation power semiconductor) business is also being materialized," and added, "Recently, a small quantity of SiC power semiconductors for domestic B2C home appliances has begun to be supplied." He explained, "Verification of technological capabilities is progressing rapidly," and "There is a possibility of investing in production lines in the second half of this year earlier than originally planned."

Researcher Ko analyzed, "Among domestic manufacturers preparing SiC power semiconductors, KEC can expect the most stable core business performance," and noted, "Even without reflecting new businesses, its growth potential stands out, and it is noteworthy that it is the fastest among competitors in materializing new business momentum."

He predicted, "As a leading domestic power semiconductor manufacturer, the technology and references recently demonstrated will continue to be highlighted."