[Asia Economy Reporter Hyungsoo Park] KPF is showing strong performance. It appears that the stock price has been influenced by securities firms' analysis predicting that all business divisions are in a super-booming phase and that robot growth momentum will be added in the second half of this year.
As of 9:58 a.m. on the 3rd, KPF is trading at 7,690 KRW, up 5.92% from the previous day.
Choi Jae-ho, a researcher at Hana Securities, estimated that KPF will achieve sales of 827.8 billion KRW and operating profit of 41.4 billion KRW this year. This represents an increase of 58.4% and 3350.0%, respectively, compared to last year.
Researcher Choi explained, "All business divisions are experiencing a boom phase," adding, "The main product, fasteners, is benefiting from the resumption of construction sites as well as the expanded application of renewable energy components such as offshore wind power and solar power."
He continued, "Since February this year, the European Union (EU) has implemented anti-dumping tariffs on Chinese fastener products, creating a spillover effect, and mid- to long-term substantial performance growth is expected."
He also forecasted, "The ship and offshore cables of TMC, acquired in July last year, will see performance improvements accelerate due to increased overseas cargo volume and increased orders by ship type."
Researcher Choi introduced, "We have succeeded in domestic production of ultra-thin bearings, essential parts for robots, and supply them to Samsung Electronics and SK Hynix," adding, "We hold a 47.5% stake in SBV Tech, a robot parts specialist company that was the first in Korea to develop and mass-produce the ultra-precision reducer ‘ROBO DRIVE.’"
He explained, "SBV Tech, a subsidiary manufacturing essential core parts for robots such as ultra-thin bearings and ultra-precision reducers, is preparing for an IPO," adding, "There is clear visibility of performance growth, and the robot parts subsidiary, whose front-end demand is rapidly increasing, has secured a new growth engine."
SBV Tech received an A-grade technology evaluation in October last year. It completed the preliminary review for listing last month and plans to officially begin the initial public offering (IPO) process in the second half of this year.
Researcher Choi analyzed, "In a situation where demand for domestic production of robot parts is increasing, direct benefits are expected," adding, "Since expansion of application to robot-related fastener products is also anticipated, visibility of performance growth is very high."
He further stated, "Most domestic robot companies are currently in the testing phase of supplying parts to Samsung Electronics, whereas SBV Tech is already supplying," adding, "Having been selected as the first smart factory support company with Samsung Electronics in 2019, it is expected to experience explosive growth in the future based on a close cooperative relationship."
Researcher Choi judged that KPF’s expected price-to-earnings ratio (PER) of 4.5 times this year urgently requires valuation rerating.
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