GL Research evaluated on the 25th that MGEN Solution should be noted for its prospects of entering the automotive parts market and expanding market share through large-scale capacity expansion.

MGEN Solution (hereinafter referred to as the company) is a company listed on the KOSDAQ market in 1997, operating AI (Artificial Intelligence) solutions within the printing and ICT (Smart City) business divisions, as well as heterologous organ bio-businesses.

As a new business, the company is developing AI-based major accident prevention solutions and a coil magnetic component business including transformers, inductors, and PFC coils through its Vietnamese subsidiary MUSEM VINA (hereinafter Musem Vina). Musem Vina’s transformer components can exclusively utilize the technology based on intellectual property rights, and it is analyzed to have a technological advantage of more than five years compared to competitors.

Transformers play the role of distributing and operating power and are essential components in all home appliances. Since MGEN Solution collaborated as a first-tier vendor for Samsung Electronics’ Home Internet of Things (IoT) division, most of Musem Vina’s products are ultimately supplied to Samsung Electronics.

Supply to LG Electronics, the global second-largest, is also being pursued with ongoing R&D. Customer registration procedures have been completed with Hisense, and TCL has also completed factory inspections and customer registration for collaboration.

Researcher Park Chang-yoon of GL Research stated, “The company has engaged in related discussions or collaborations with all four of the global top-tier home appliance companies,” adding, “In particular, transformers are essential components for electric vehicles, and given the importance of safety such as fire prevention in automotive parts, Musem Vina’s dustproof and moisture-proof technologies are expected to be competitive in the automotive market.” In fact, MGEN Solution is currently undertaking national projects related to electric vehicles.

He continued, “Currently, Musem Vina’s factory is operating at virtually 100% of its capacity (CAPA),” and added, “Supply does not fully meet customer demand, so continuous expansion is planned.”

On October 1st, the first phase of additional line installation and process efficiency improvements will increase yield to over 90% and CAPA to approximately 6.75 million units per month. By the second half of 2025, capacity expansion to 200% of the current CAPA is expected to be completed, and after the second phase of expansion, CAPA is projected to increase to about 10 million units per month. Through this expansion, the company plans to increase its market share within customers from the current 30% to at least 70%.

The company explained, “The expected operating profit margin in 2025, when the expansion is completed, will be in double digits, achieving 3 to 4 times higher operating profit margins compared to competitors without automated lines,” and added, “From the third quarter of this year, when Musem Vina’s sales are fully reflected, a turnaround to profitability is expected due to increased sales from local government-owned communication networks (BcN) and improved yield at Musem Vina.”

Researcher Park also highlighted the company’s benefits from government policies. The government is promoting a policy to increase construction industry safety and health management costs (San-an-bi) from the current level of about 1.5% of total construction costs to around 15-20%, which is expected to expand the application of the company’s solutions on-site. Additionally, with the Advanced Regenerative Bio Act (Cheomsaeng Act) amendment scheduled for enforcement in February 2025, the company, which is conducting heterologous organ research, is identified as a key beneficiary.

Regarding the company’s entry into the automotive parts market, he analyzed, “Joint development is underway with global automakers, and positive responses are being received based on the company’s exclusive technological capabilities,” noting, “It holds strengths in safety, reliability, and de-China (탈중국) related advantages.”