[Click eStock] "Setrec Eye, Attention on Largest Order Backlog Since Establishment"

Stunning Value Research analyzed on the 2nd that Setrec Eye is recording the largest order backlog since its establishment. No investment opinion or target price was presented.

Namgung Jun, a researcher at Stunning Value Research, evaluated, "Setrec Eye is the only domestic company that possesses all three core technologies required for satellite system development (satellite body, electro-optical payload, ground station system)."

He stated, "On the 25th of last month, they signed a contract with the Korea Aerospace Research Institute to develop the 1st and 2nd private optical satellites worth 172.7 billion KRW," adding, "This amount corresponds to about 138% of last year's sales and is the largest order in Setrec Eye's history."

He added, "As of the first quarter, the order backlog was 337.7 billion KRW, and after two additional contracts, the current order backlog is estimated to be about 611.7 billion KRW," and said, "The qualification for bidding on this contract was domestic companies with delivery performance of over 5 billion KRW related to satellite bodies." He further noted, "This contract is judged to recognize Setrec Eye's technological capability to manufacture high-performance satellites."

In particular, it is expected that the subsidiaries will also turn profitable starting next year. He said, "On a consolidated basis in the second quarter, sales were 474.6 billion KRW, an increase of 22.1% compared to the same period last year, but an operating loss of 1.5 billion KRW was recorded," and explained, "Consolidated sales increased due to new orders, but the operating loss was due to the fixed cost burden of the subsidiary SIA."

He continued, "To turn operating profit positive, it is judged that reducing losses of subsidiaries SIIS and SIA will be important," emphasizing, "After the launch of the observation satellite SpaceEye-T in early 2025, SIIS is expected to secure high-resolution images and reception contracts, and SIA is expected to reduce costs through self-supply of images and secure customers, so the operating profits of the two subsidiaries are expected to turn positive next year."