[Click eStock] "CS Bearing, Performance Growth Accelerates with Customer Diversification"

Ebest Investment & Securities analyzed on the 14th that CS Bearing is expected to see full-scale performance growth due to diversification of its client base.

Lee Ju-young, a researcher at Ebest Investment & Securities, stated in a report on the same day, "As seen in the recent wind power supply chain issues, securing the component supply chain will become increasingly important," adding, "Due to the ongoing high interest rates, wind turbine manufacturers are in urgent need of cost reduction, but CS Bearing's production facilities are entirely located in Vietnam, resulting in relatively low transportation and labor costs."

Among domestic and international competitors, there is currently no company with a cost competitiveness advantage over CS Bearing. It is explained that client companies' love calls toward CS Bearing, which guarantees delivery and quality without concerns and also enables cost reduction, will continue. CS Bearing's pricing negotiation power is also expected to strengthen further.

The researcher said, "Significant performance growth is expected with GE's capacity expansion and acquisition of new clients. GE, which accounts for 94% of CS Bearing's sales, is pursuing production capacity (CAPA) expansion through the expansion of existing factories and construction of new factories," adding, "New orders are expected accordingly, and we judge that CS Bearing has a high possibility of winning these orders."

Additionally, sales to Vestas and Enercon are expected to be newly recognized starting next year and the year after, respectively, and in the case of Siemens Gamesa Renewable Energy (SGRE), CS Bearing's new orders are anticipated due to a large-scale quality issue that occurred in June. Securing replacement demand is expected to serve as a stepping stone for expanding SGRE's share.

He forecasted, "The current stock price is at a 12-month forward price-to-earnings ratio of 22.0 times and a price-to-book ratio of 2.8 times," and added, "Profitability improvement is expected to accelerate from next year due to client expansion and strengthened pricing negotiation power."