[Special Stock] EcoEye, the Top Earner in the Emission Rights Sector... Benefiting from US-China Joint Climate Crisis Response

EcoEye is showing strong performance on its first day of listing. Oh Hyunjin, a researcher at Kiwoom Securities, analyzed EcoEye, stating, "As global trends toward greenhouse gas reduction and related regulations strengthen, the investment attractiveness will increase."

As of 1:29 PM on the 21st, EcoEye is trading at 50,700 KRW, up 46.11% from the public offering price of 34,700 KRW.

Founded in 2005, EcoEye is a specialized company in greenhouse gas reduction projects that reduce greenhouse gases generated from corporate activities or daily life. It sells carbon emission rights issued through certification by international organizations (UNFCCC) and private certification bodies, corresponding to the amount of greenhouse gas reduction.

EcoEye reduces greenhouse gas emissions by replacing traditional stove-type cooking tools (cookstoves) used in developing countries with high-efficiency products. High-efficiency cookstoves not only reduce greenhouse gas emissions but also decrease firewood consumption and reduce toxic gas emissions caused by incomplete combustion. The company also conducts various greenhouse gas reduction projects such as PNG leak prevention projects that reduce carbon by repairing gas pipeline leaks and mangrove afforestation projects that absorb carbon through forest reforestation.

EcoEye holds a market share of 55.3% in overseas external project certification performance (i-KOC) and 13.1% in domestic external project certification performance (KOC) based on cumulative certification results in the Republic of Korea's emission rights registration system. Given its high market share in the overseas greenhouse gas reduction project sector, its core business, EcoEye is regarded as a leading company in the overseas greenhouse gas reduction project field. EcoEye's sales increased to 27 billion KRW in 2021, 60.1 billion KRW in 2022, and 53.3 billion KRW in the first half of this year. Operating profits during the same period were 10.2 billion KRW, 15.6 billion KRW, and 15.9 billion KRW, respectively.

With extensive know-how in greenhouse gas reduction projects accumulated over a long period, EcoEye is securing projects that yield investment returns ranging from 70% to 400% through thorough risk management and business analysis. It anticipates that carbon emission rights prices will rise due to factors such as an increase in the ratio of paid allocation of carbon emission rights for companies, relaxation of restrictions on the carryover of carbon emission rights, and the expansion of the application of the European Carbon Border Adjustment Mechanism (CBAM).

EcoEye has early secured a market with high entry barriers and established a solid overseas network to secure business opportunities. It has partnerships with 19 national institutions and global oil company S.

A KB Securities official, the lead underwriter for the listing, explained the demand forecast results, saying, "EcoEye has achieved significant performance growth over the past three years, with sales in 2022 reaching six times that of 2020. Its trading of carbon emission rights in both domestic and overseas markets, which diversifies price risk, appears to have been highly evaluated."

Lee Subok, CEO of EcoEye, said, "Now that global companies are actively engaging in ESG (Environmental, Social, and Governance) management, our business is just beginning to attract attention. We will continue to grow steadily through active business expansion and demonstrate leadership in the carbon emission rights market."

The 28th United Nations Climate Change Conference of the Parties (COP28) will be held at Expo City in Dubai, United Arab Emirates, on the 30th. This COP28 is significant as it is the first global stocktake (GST) since the Paris Agreement.

Sultan Ahmed Al Jaber, Chair of the 28th United Nations Climate Change Conference of the Parties (COP28), stated in a press release on the 15th (local time), "We welcome the agreement between the United States and China (the Sunyland Statement on strengthening cooperation to address the climate crisis)." He added, "The global stocktake (GST) proves that much work remains to keep the global temperature rise below 1.5℃ compared to pre-industrial levels," emphasizing, "All parties must unite, act, and make ambitious GST decisions at COP28."

Lee Kyungyeon, a researcher at Daishin Securities, analyzed, "Disclosing corporate climate risks can change the flow of capital," explaining, "This is because 'Scope 3,' which calculates responsibility for greenhouse gas emissions, is applied to investments." He also noted, "Major global pension funds and financial institutions have begun managing 'financial emissions,' the carbon intensity of their investment and loan portfolios," forecasting, "This new perspective on greenhouse gas emissions will present both challenges and opportunities to financial institutions and investors."