[Click eStock] "Hanguk Danja, High Growth Phase for Electric Vehicle Connectors"

Hana Securities stated on the 23rd that "Korea Connector is experiencing rapid growth in orders and sales of electric vehicle connector parts in North America and other regions," and diagnosed that "considering this, the current stock price is excessively undervalued."

Song Seonjae, an analyst at Hana Securities, said in a report on the same day, "Korea Connector's US subsidiary is rapidly growing by receiving large orders for ICB (Inter-Connect Board) products from North American automakers and secondary battery manufacturers," and analyzed, "Although domestic sales decreased by 5% in the first quarter of this year, sales in the US and Poland grew by 810% and 96%, respectively."

Korea Connector recorded sales of 325.1 billion KRW and operating profit of 34.7 billion KRW in the first quarter of this year. This represents a 12% increase in sales and a 77% increase in operating profit compared to the same period last year. In particular, the performance growth of the US and the Mexico subsidiary, where the US subsidiary's production plant is located, was steep. The simple combined sales of the US and Mexico increased from 8.6 billion KRW in 2022 to 88.4 billion KRW last year. In the first quarter of this year, sales reached 69.6 billion KRW. If the trend continues, annual sales this year will exceed 250 billion KRW.

Analyst Song forecasted, "Based on the already secured order volume and the expansion of the Mexico second plant, high growth is expected for the next few years," and added, "The increase in order volume from existing customers and the additional construction of electric vehicle plants in Mexico will act as opportunity factors for performance growth." He also predicted, "The Poland subsidiary will continue external growth centered on ICB products as European automakers increase electric vehicle production."

He expected, "Although it will be difficult to pass on the rising cost of raw materials such as copper to sales prices, resulting in increased cost burdens for the time being, the high growth of overseas electric vehicle product lines will alleviate fixed cost burdens and partially offset the cost increases."