[Click eStock] "GoYoung Benefits from Global Supply Chain Production Base Restructuring"

[Asia Economy Reporter Jang Hyowon] Hi Investment & Securities analyzed on the 2nd that Goyoung is expected to benefit from the reconstruction of production bases in the global supply chain. The target stock price was maintained at 18,000 KRW.

Researcher Lee Sangheon of Hi Investment & Securities stated in a report on the same day, “The global supply chain disruption caused by COVID-19 has led to the relocation of production bases concentrated in specific countries,” and “The geopolitical crisis triggered by Russia's invasion of Ukraine has highlighted security issues, accelerating the deglobalization of the global supply chain.”

In fact, the United States is reorganizing the global supply chains of industries such as semiconductors, secondary batteries, key minerals, and bio, which were concentrated in China, through the Inflation Reduction Act (IRA) and other measures. As production bases that were concentrated in specific countries diversify into countries specialized by industry, investments in the relocation of production bases are expanding.

Researcher Lee Sangheon forecasted, “Goyoung's consolidated sales and operating profit last year are expected to increase by 11.7% and 6.3% year-on-year to 276.2 billion KRW and 44 billion KRW, respectively,” adding, “Despite the impact of China's lockdown last year, the relocation of production bases in the North American region has begun in earnest, leading to a significant increase in demand for 3D inspection equipment, which is expected to boost sales in the automotive electronics sector.”

He continued, “Although a contraction in upstream investment is inevitable due to the recent realization of a global economic recession, investment in the reconstruction of production bases is expected to accelerate due to the deglobalization of the global supply chain.”

Accordingly, the expansion of demand for Goyoung's 3D inspection equipment is expected to be a driving force for sales growth this year. In particular, demand for smart factory solutions (KSMART) related to the relocation of production bases from global EMS and automotive electronics clients is also expected to increase.

Furthermore, the growth potential of medical robots is expected to accelerate. Goyoung developed Kaimeiro, a brain surgery medical robot based on 3D measurement inspection technology. At the end of 2016, it received manufacturing and sales approval for Kaimeiro from the Ministry of Food and Drug Safety, and subsequently completed clinical trials at domestic hospitals over two years.

He stated, “This year, sales of two or more brain surgery medical robots are expected,” and added, “After expanding sales to major domestic hospitals to build a track record, clinical trials with the U.S. Food and Drug Administration (FDA) are expected to be pursued in the second half of this year.”

He added, “Accordingly, Goyoung plans to obtain U.S. FDA approval next year and make a full-scale entry into the U.S. medical robot market, accelerating the growth potential of medical robots.”