[Click eStock] "Contec, Space Policy Momentum Continues"

NH Investment & Securities analyzed on the 26th that although Contack's short-term performance falls short of expectations, structural growth is anticipated due to ongoing policy momentum.

Contack is a company that provides all-in-one services in the downstream sector, ranging from the design, construction, and operation of space ground stations to satellite data reception, processing, analysis, and utilization. Its current main business segment is ground station system engineering, offering turnkey solutions from the design and construction of ground stations for satellite data transmission and reception to communication testing and operation-related solutions.

Kang Kyung-geun, a researcher at NH Investment & Securities, stated in the report that “The GSaaS (Ground Station as a Service) network solution is a service that provides satellite data received through the company’s ground stations to customers in real time, and high growth potential is expected in the future,” adding, “The number of satellites using ground station services was about 100 as of early this year, which is still in the initial stage, but it is expected to increase proportionally with the rise in satellite launches.”

Researcher Kang explained, “A sharp increase in sales is expected due to the rise in private satellite launches, and after covering fixed costs, a high level of operating leverage effect is anticipated,” and “Currently, the company owns 12 ground stations in 9 countries globally, and the goal is to establish 15 ground stations in 12 countries to secure market leadership.”

He also analyzed, “As of the end of last year, the order backlog was 31.1 billion KRW, and the new order target for this year is around 45 billion KRW,” adding, “Although short-term performance falls short of expectations due to order delays and a slowdown in the supply of key components, growth potential remains valid from a mid- to long-term perspective.”

Furthermore, he noted, “Policy momentum continues with the announcement of the Space Development Promotion Implementation Plan in March and the opening of the Space Aviation Agency on May 27,” and predicted, “The trend of increasing private satellite launches will lead to structural growth in the GSaaS network sector.”