[Special Stock] Jeryong Electric's Operating Profit Jumps from 100 Million to 30 Billion Won... Establishes Itself as a Major Transformer Supplier in the U.S.

[Asia Economy Reporter Hyungsoo Park] Jeryong Electric is showing strong performance. It is becoming a key supplier capable of meeting the annual demand for transformers in the United States, and this is expected to drive significant growth, which appears to be influencing its stock price.

As of 9:18 AM on the 8th, Jeryong Electric is trading at 9,700 KRW, up 6.24% from the previous day.

Jeryong Electric's main products are transformers, circuit breakers (switchgear), and other medium-voltage distribution equipment. According to this year's semi-annual report, cumulative sales of transformer products reached 12.4 billion KRW, accounting for approximately 54.8% of the total sales of 22.7 billion KRW.

Researcher Dan FS from FS Research explained, "Jeryong Electric has been securing explosive orders since the beginning of this year," adding, "Including the single sales and supply contract disclosure on the 5th, a total of 18 orders have been recorded."

He continued, "The cumulative order contract amount this year is about 218.5 billion KRW, marking the largest order boom in history," emphasizing, "It is noteworthy that most of these orders are focused on exports to the United States."

He noted, "The export ratio increased from 15% in the first quarter to about 32% in the second quarter," and predicted, "Profitability is also rapidly improving, and export volumes are expected to increase significantly starting from the third quarter."

It is estimated that in the third quarter, sales will reach 45.3 billion KRW and operating profit 7.3 billion KRW, representing increases of 246.3% and 605.4% respectively compared to the previous quarter.

The researcher analyzed, "While sales through exports in the second quarter were 4.2 billion KRW, they are expected to reach 37.3 billion KRW in the third quarter, an increase of 781.4% quarter-on-quarter," and "The operating profit margin from exports is confirmed to exceed 20%."

Furthermore, he stated, "Orders are expected to continue into next year," introducing, "Jeryong Electric officially entered the U.S. market by supplying transformers to the LA Department of Water and Power in 2019, gaining recognition for its technology and quality." He added, "They have secured various customers in Oklahoma and New Jersey, establishing themselves as a supplier capable of meeting the annual demand for transformers in the U.S."

The annual demand for transformer replacements in the U.S. is about 10 million units, and if Jeryong Electric continues to secure orders at the current pace, structural growth is expected to continue.

It is estimated that this year, sales will reach 110.9 billion KRW and operating profit 14.7 billion KRW, increases of 127.0% and 14,599.7% respectively compared to last year. Next year, sales are expected to reach 160 billion KRW and operating profit 30.4 billion KRW.