[Click eStock] "SNT Motive, Reduced Supply to Automakers Shrinks Scale... Target Price Down"

Daishin Securities on the 14th lowered the target price of SNT Motive, a KOSDAQ company engaged in automotive parts and defense industries, by 3% to 56,000 KRW. This is based on the analysis that the performance slightly contracted as the client reduced order volumes.

Kang Jeong-hoon, Head of Special Development Team 2 at SNT Motive, is being interviewed on the 2nd at the "Korea International Defense Industry Exhibition" held at Gyeryongdae, Chungnam. Photo by Kang Jin-hyung aymsdream@

Kim Gui-yeon, a researcher at Daishin Securities, stated, "The finished car clients to whom SNT Motive supplied have stopped production of some models, leading to an overall reduction in supply volume," and forecasted, "This year, a sales decrease of about 140 billion KRW in the Drive Unit (DU) sector and about 60 billion KRW in the Battery Electric Vehicle (BEV) motor sector is inevitable."

Researcher Kim added, "The third-quarter performance this year is expected to be favorable and in line with market consensus (average earnings forecast)," but also predicted, "Sales of DU for the GM Bolt electric vehicle (EV) will decline, and shipments of motors for Hyundai's derivative EVs will decrease, causing a slowdown in scale until the third quarter."

He said, "Despite the slowdown in scale, SNT Motive has demonstrated profit resilience by maintaining a stable operating profit margin (OPM)," and anticipated, "Next year, the company will be able to prove its growth potential through the base effect from this year's sales slowdown, an increase in HEV starter motor volumes, and new motor order achievements."

He continued, "The company will emerge from the performance slowdown phase after the fourth quarter of this year," adding, "The other business division, centered on defense industry projects in the second half, will show a boom due to seasonal effects."