Daesung Hitech is showing strong performance. As a company with ultra-precision component technology, securities firms' analysis that it is a beneficiary of core parts for electric vehicles and robots seems to be influencing its stock price.
As of 11:33 AM on the 12th, Daesung Hitech is trading at 12,460 KRW, up 15.48% from the previous day.
Hana Securities analyzed that Daesung Hitech is undervalued considering the growth of the electric vehicle and robot markets.
Founded in 1995, Daesung Hitech is an industrial machinery manufacturer. In 2014, it acquired Nomura VTC, a Japanese machine tool company, and entered the Swiss-type automatic lathe manufacturing business producing ultra-precision components. Since last year, it has been expanding its advanced industry precision parts business in sectors such as robotics, electric vehicles, defense, and semiconductors.
Its main products include Swiss-type automatic lathes, compact machining centers, and precision components. Swiss-type automatic lathes are equipment produced by only about 10 global companies, with four companies including Daesung Hitech (Star, Citizen, Tsugami, etc.) holding about 80% of the market. It is a market with high technological barriers.
Researcher Cho Jeong-hyun of Hana Securities explained, "Compact machining centers are small machine tools used to produce battery cases (end plates) and electric vehicle module parts," adding, "Daesung Hitech is expected to expand orders for compact machining centers this year due to the acceleration of U.S. expansion by the three domestic battery companies following the IRA legislation."
He continued, "They are currently conducting tests to supply core parts to global robot companies," and added, "Expansion of the precision parts business is expected."
Researcher Cho analyzed, "They are developing MSO coil manufacturing technology, a next-generation part for electric vehicles," explaining, "MSO coils use a third-generation coiling method that reduces electrical resistance in electric vehicles, improving motor efficiency and increasing driving range." He also added, "They are advancing technology and developing equipment for MSO coil production targeting global automaker H."
He emphasized, "Considering the growth of the electric vehicle and robot markets, a price-to-earnings ratio (PER) of 10 times based on expected 2024 performance is an undervalued phase," and "Daesung Hitech is expected to expand its business with precision parts for advanced industries such as robotics, electric vehicles, and defense."
It is expected that sales from machining centers will start in earnest and the precision parts business will continue to grow. Sales are estimated to reach 151.2 billion KRW and operating profit 18.7 billion KRW next year, which are increases of 13.9% and 36.4%, respectively, compared to this year.
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