[Click eStock] "Daia TI, Benefiting from the Introduction of Korean-style Train Control System"

[Asia Economy Reporter Hyungsoo Park] On the 3rd, SK Securities described Daea T&I as a unique railway signal control system company. It is expected to benefit as the Korea Rail Network Authority begins transitioning to KTCS-2 (Korean Train Control System).

Daea T&I is a company engaged in railway signal systems and railway communication and transmission network construction projects. The railway signal system refers to a system that checks the location of trains and track conditions and adjusts the spacing and operation of trains. It is the most important safety device to prevent train accidents. As train speeds increase, the importance of railway signal control systems is growing.

Seungdoo Na, a researcher at SK Securities, explained, "Daea T&I localized the railway central control system, CTC, and carried out the work of integrating control facilities and systems in various regions of Korea into one."

He added, "As of the end of the first quarter of this year, the order backlog exceeded 260 billion KRW. Considering that orders are generally concentrated in the fourth quarter, the year-end order backlog is likely to approach 300 billion KRW."

Based on last year's consolidated financial statements, Daea T&I recorded sales of 116.3 billion KRW and an operating profit of 9.6 billion KRW.

Researcher Na introduced, "Although an overseas technology-based ATC (Automatic Train Control system) was used, KTCS-2 began to be applied from April on the Iksan-Yeosu Expo Jeolla Line section. Daea T&I has participated in national R&D projects since 2015 to develop domestic technology." He emphasized, "They won a pilot project for the Jeolla Line section in 2020 and started applying it to actual train operations from this year."

Daea T&I was responsible for all necessary electronic interlocking devices, ground signal systems, and CTC for integrated management of KTCS-2. The Korea Rail Network Authority plans to invest 2.2 trillion KRW by 2032 to convert 96 lines totaling 4,848 km to KTCS-2.

Additionally, he said, "The promotion of the construction of the 2nd Railway Traffic Control Center is also a positive factor. The project aims to reduce the workload saturation of the existing railway traffic control center due to the increase in railway lines and to promote uninterrupted control operations through redundancy. The 2nd Railway Traffic Control Center construction project is scheduled to be operational by 2027."

Researcher Na analyzed, "Daea T&I has experience in building, operating, and maintaining high-speed railway control systems that integrate the Gyeongbu High-Speed Railway Phase 2 section with 100% domestic CTC localization, as well as the Gyeongbu High-Speed Railway Phase 1, Honam High-Speed Railway, and Seoul Metropolitan Area High-Speed Railway."