[Click eStock] "Woosoo AMS, Full-Scale Performance Improvement in the Second Half"

Yuanta Securities analyzed on the 22nd that the second half of the year will be a period when expectations for Woosoo AMS become reality. No investment opinion or target price was provided.

Woosoo AMS recorded sales of 87.9 billion KRW and operating profit of 2.7 billion KRW in the first quarter. Sales increased by 0.4% compared to the same period last year, but operating profit decreased by 9.5%. Myungjun Kwon, a researcher at Yuanta Securities, explained, "On a separate basis, first-quarter sales and operating profit grew by 4.9% and 94.5% respectively compared to the same period last year," adding, "Sales volume of automobiles with a high average selling price (ASP) is increasing, and sales expansion to domestic and overseas customers continues, so the core business growth trend is expected to continue."

He expected that the large-scale orders received last year will be recognized starting from the third quarter of this year. He said, "Woosoo AMS secured new orders worth approximately 490 billion KRW last year, and revenue recognition will begin this year," adding, "Typically, automobile parts sales continue for seven years, amounting to about 70 billion KRW annually."

He continued, "This accounts for more than 20% based on 2023 sales," and explained, "Also, since these orders are related to hybrid and electric vehicles, it implies an expansion of the scope from internal combustion engine vehicles to eco-friendly vehicles."

He also expected subsidiary sales to become full-fledged. He said, "Woosoo TMM possesses technological capabilities related to parts such as motors and inverters through the localization development of ultra-small electric vehicles," adding, "Based on this, it is attempting to enter aviation, defense, land, and maritime sectors."

He emphasized, "The market situation is positive as electrification is progressing in various industries, but it is a blue ocean market characterized by small-volume, multi-product production," and added, "Woosoo TMM is judged to have competitiveness as it can provide integrated solutions ranging from motors and inverters to control."

He explained, "Recognition of technological capabilities is being received as technology development related to aviation and defense is underway," and added, "Currently, production lines are being established, and discussions with multiple companies are ongoing, so initial sales are expected to begin within the year."