[Click eStock] "IlanTech, Electronic Cigarette Sales Surge... Operating Profit Up 197% This Year"

[Asia Economy Reporter Ji Yeon-jin] Hana Financial Investment announced on the 8th that it raised the target stock price of IrenTech from the previous 30,800 KRW to 34,900 KRW while upgrading its earnings forecast, maintaining a buy investment opinion.

Kim Gyu-sang, a researcher at Hana Financial Investment, stated, "The increase is due to the rise in the average selling price (ASP) of cases for mobile phones, the strong sales of electronic cigarette devices, and the full-scale sales of home ESS battery packs."

IrenTech's consolidated sales and operating profit this year are expected to increase by 60.2% and 197.8% year-on-year to 1.2235 trillion KRW and 101.9 billion KRW, respectively. In the first quarter, KT&G, a client of electronic cigarette devices, purchased 111.9 billion KRW worth of storage products (NGP devices, tobacco storage products, etc.), and IrenTech's electronic cigarette sales amounted to 78.7 billion KRW. This accounted for more than 70% of KT&G's total electronic cigarette device production in the first quarter.

IrenTech started producing electronic cigarette devices in 2020, at which time its share within the client was only 5.2%. However, it rose to 34.2% in 2021 and 70.4% in the first quarter of this year, becoming the top supplier within the client in just two years. Researcher Kim said, "The Lil Solid 2.0 model produced by IrenTech does not have a liquid cartridge and is designed with an induction heating method, unlike other models, making it free from patent disputes." He added, "The upcoming new product from Philip Morris, IQOS Iluma, also adopts the induction heating method." He continued, "Considering that IrenTech's share within the client reached 70% in the first quarter of this year, it is natural that it will become the most trusted supplier of electronic cigarette devices for the client in the future."

As KT&G plans to expand its export countries from the current 25 to 31 in the second half of this year, it is expected to have a positive impact on IrenTech's electronic cigarette device sales.

On May 19th, IrenTech announced the first shipment of home Energy Storage System (ESS) batteries. This product is the world's first home ESS to obtain 'UL9540A' certification, recognized for its high safety. UL9540A is a method to evaluate fire propagation caused by thermal runaway in ESS. According to the current ICC International Fire Code (2018 IFC) and NFPA 855 (National Fire Protection Association), devices with UL9540A certification are allowed up to 250kWh.

Researcher Kim said, "IrenTech has started targeting advanced markets such as the U.S., Europe, and Australia together with L Company, the largest home appliance company in Korea, through UL certification and know-how accumulated from past small and medium-sized ESS batteries. From the second half of this year, a full-scale corporate value reassessment is expected due to the inclusion in the ESS battery value chain."