[Click eStock] "AESTECH, Penetrating Global Market with UV Protection Ingredient"

Kiwoom Securities forecasted on the 3rd that ‘AS Tech,’ a producer of organic ultraviolet (UV) blocking materials, will experience rapid growth as it secures top-tier global companies as clients.

AS Tech is a manufacturer of UV blocking materials. Since its establishment in 2005, it has been producing organic UV blocking materials based on synthetic technology know-how accumulated from its pharmaceutical raw material manufacturing business. It succeeded in domestic production of ‘DHHB,’ a substance used for blocking UVA (Ultraviolet A). Its main product, ‘Uvimax DHHB,’ is a generic version of DHHB originally made by a German company and has been achieving results in the global market.

Kiwoom Securities analyst Kim Hak-jun explained, "AS Tech has secured proprietary manufacturing technology, creating a high entry barrier," adding, "By penetrating the global market with low costs, it expanded its production capacity (CAPA) from the existing 600 tons to 1,200 tons in November last year." He also stated, "AS Tech currently counts both the No. 1 UV blocking material company in the market, German Company A, and the No. 2 company, DSM, as its clients. It signed a four-year long-term supply contract with Company A from 2020 through this year and plans to sign a five-year exclusive supply contract with DSM."

Analyst Kim projected, "The global sun care market is growing at an average annual rate of 11%, and as demand continues to increase for switching UVA filter raw materials to DHHB, AS Tech will show a steep performance growth trend." He also anticipated, "The sun care product line of Korea’s major client, Kolmar Korea, will continue to grow, leading to a strong growth trend in domestic sales." Furthermore, he added, "AS Tech is preparing to build a second plant similar in scale to its first plant, which has a capacity of 1,200 tons, to produce new products," and expressed expectations that "performance improvements due to the operation of the new plant can be expected starting from the second quarter of next year when the expansion is completed."

Reflecting this, he projected AS Tech’s sales for this year to increase by 28.7% year-on-year to 60.9 billion KRW, and operating profit to improve by 23.1% over the same period to 14.1 billion KRW.