[Click eStock] "AP Satellite, Expected Increase in Orders Due to Rising Investment in Space Development"

Hi Investment & Securities analyzed on the 3rd that AP Satellite's new orders are expected to expand due to increased investment in space development. No investment opinion or target price was provided.

The government has set a goal to raise South Korea's global space industry market share, currently about 1%, to 10% by 2045. To achieve this, the government plans to increase its space development investment from 730 billion KRW in 2021 to 1.5 trillion KRW by 2027.

Lee Sang-heon, a researcher at Hi Investment & Securities, said, "AP Satellite is already developing the data link for the multipurpose practical satellite 6 and the satellite electric ground support equipment (EGSE)." He added, "After recently winning the next-generation medium-sized satellite 1/2 standard payload computer development project, the company is participating in the development of the payload device data processing unit for the multipurpose practical satellite 7 and plans to actively participate in future military reconnaissance satellite projects."

He continued, "The company has been verified through participation in various satellite manufacturing projects," adding, "With the government increasing its space development investment, participation in multiple projects will become possible, and benefits are expected from the increase in new orders."

Additionally, the increase in new orders for the Korean Positioning System (KPS) development project last year, which has expanded the order backlog, is also a positive factor. The KPS development project involves investing 3.7235 trillion KRW from 2022 to 2035 to develop and build a satellite navigation system that can provide ultra-precise positioning, navigation, and timing information for the Korean Peninsula and nearby regions.

He explained, "In December 2022, AP Satellite signed a contract for the design and manufacture of the onboard computer for the KPS 1 satellite." He added, "The flight model of the KPS satellite onboard computer developed through this order will perform stable operation of the flight software for the KPS satellites' mission execution and exchange command and status information between the ground station and the satellite."

He analyzed, "In September last year, a contract worth 13.8 billion KRW was signed with the Electronics and Telecommunications Research Institute for the development of the KPS navigation payload transmitter and receiver." He added, "Due to such an increase in new orders, the order backlog reached 36.5 billion KRW as of the end of September last year." He further noted, "Above all, this year, various projects related to space development are expected to unfold, and with the expansion of related new orders, the company's valuation can be leveled up."