[Click eStock] "Korea FT, HEV Sales Increase Boosts Related Parts Performance"

Hana Securities forecasted on the 27th that Korea FT, an automotive parts company, will continue its sales and profit growth trend as sales of parts related to hybrid electric vehicles (HEV) increase.

The share of hybrid vehicle registrations in South Korea exceeded 20% for the first time in the first half of this year. [Image source=Yonhap News]

Korea FT achieved sales of 190.6 billion KRW and an operating profit of 12.8 billion KRW in the second quarter of this year. These figures represent increases of 14% and 156%, respectively, compared to the same period last year. Sales of the core part, the carbon canister, which accounts for 39% of total sales, increased by 8%. The canister is a component that captures evaporative gases inside the fuel tank and returns them to the engine. Sales of filler necks, which are pipes connecting the fuel filler port and the fuel tank, as well as interior and exterior parts, also rose by 36% and 12%, respectively.

Sunjae Song, an analyst at Hana Securities, analyzed, "The increase in hybrid vehicle sales has led to higher usage and prices of canisters, and supply of interior parts to Europe has increased." He also assessed, "The Chinese subsidiary turned profitable due to increased operating rates, contributing to improved profitability."

Analyst Song stated, "With the strengthening of global environmental regulations, the use of high-performance canisters is increasing," adding, "In particular, the proportion of canisters used for HEVs is on the rise." He continued, "Sales of hybrid vehicles by major clients Hyundai Motor and Kia increased by 11% compared to last year, and supply of canisters and filler necks to certain models for General Motors (GM) in the U.S. is also increasing."

He noted, "Korea FT's stock price is somewhat undervalued compared to peer companies, with a price-to-earnings ratio (PER) of about 5 times and a price-to-book ratio (PBR) of 0.8 times," and predicted, "As the transition to electric vehicles is delayed, HEV sales are increasing, so the trend of performance improvement is expected to continue for the time being."