[Special Stock] ATYTC Supplies Key Components Directly Linked to Secondary Battery Productivity to Samsung, LG, and SK... Attractive Undervaluation

[Asia Economy Reporter Hyungsoo Park] HYTC is trading near its offering price on its first day of listing.

At 9:25 a.m. on the 9th, HYTC was trading at 15,300 KRW, up 4.08% from the opening price.

The opening price was set at 14,700 KRW, 300 KRW lower than the offering price of 15,000 KRW.

HYTC produces various products across the slitting stage of the electrode plate process and most stages of the assembly process in secondary battery manufacturing. It has established overseas subsidiaries in Poland, Nanjing in China, and Ohio in the United States, building regional bases in Europe, Asia, and the Americas.

FS Research introduced that HYTC supplies key components directly linked to battery productivity to all three major battery companies. The ultra-precision parts for secondary battery equipment, which account for the majority of sales, are consumables used in the secondary battery production process and are key components directly related to battery productivity. As the three domestic battery cell companies are accelerating new equipment installation and expansion to increase cell production in the short term, HYTC is expected to benefit. The company maintains higher profit margins compared to competitors through continuous product improvements and new product development.

Jongseon Park, a researcher at Eugene Investment & Securities, explained, "As secondary battery companies expand, demand for ultra-precision parts is expected to increase," adding, "With the rise in operating rates of secondary battery manufacturers, the product replacement cycle shortens, leading to a significant increase in parts demand."

He continued, "Due to increased use of ultra-precision parts, the product order timing is shortening and order volumes are gradually increasing," adding, "We produce ultra-precision parts for equipment used in the electrode plate process and assembly process of secondary battery manufacturing."

Furthermore, "The company is pursuing expansion using the proceeds from the public offering," and "Sales growth will continue with increased production capacity," he forecasted.

Researcher Park analyzed, "They are jointly developing notching molds according to customer needs," and "They are developing press molds that punch the tab shapes of cathode and anode plates into respective electrode plate forms." He added, "With faster production processes, productivity improves, and coverage can be expanded from winding-type to stacking-type batteries," and "Related sales are expected as notching molds are supplied to overseas factories."

Researcher Park analyzed, "The offering price of 15,000 KRW corresponds to a PER of 18.0 times based on this year's expected performance, which is about a 30% discount compared to the average PER of 26.0 times for similar domestic companies," and "The freely tradable shares after listing account for 39.0% of the total shares, which is a considerable proportion."