[IPO] M&C Solution "Building a Sustainable Growth Foundation through Global Defense Spending Increase"

The Nation's First and Only Defense Servo Valve Developed...Exports Surpass Domestic Sales
Demand Forecast Until December 2, Public Subscription December 5-6, Aiming for KOSPI Listing Within the Year

Kim Byung-geun, CEO of M&C Solution, is introducing the company at a press conference for KOSPI listing on the 29th. Provided by M&C Solution.

MNC Solution (MNC Solution, CEO Kim Byung-geun), a specialized company in motion control components for defense, held a press conference on the 29th in Yeouido, Seoul, attended by key executives, to reveal the company's core competitiveness and future growth strategies for its KOSPI listing.

Since its establishment in 1974, MNC Solution has been a company specializing in research and development of motion control and precision control technologies for defense for 50 years. In 1999, the company succeeded in developing and mass-producing the first domestic servo valve for defense, establishing itself as a key player leading the localization of South Korea's defense industry. In December 2023, the defense business division was spun off independently and relaunched as 'MNC Solution.'

The company actively participates in development and mass production projects across all sectors of the defense industry, including ground, guided, maritime, aviation, and space, contributing to the modernization of South Korea's weapon systems and enhancement of defense capabilities. Major products include ▲ turret drive systems for the K2 tank and K9 self-propelled howitzer ▲ launcher drive devices for guided weapons such as Cheonmu and Cheongung-II ▲ hydraulic pumps and fuel control devices for aircraft like KF-21 and Surion ▲ stabilization devices for sonar equipment on ships and submarines.

In particular, the defense servo valve, which the company uniquely developed and mass-produced domestically in 1999, is a device that precisely controls flow and pressure using fine electrical signals. This technology not only applies to defense but also demonstrates the company's advanced technological capabilities by being applicable in various industries such as aerospace, robotics, and steel manufacturing.

Based on its core component development and manufacturing technologies, including defense servo valves, the company plays a crucial role in strengthening the global presence of K-defense. The Russia-Ukraine war and the expansion of geopolitical risks in the Middle East have highlighted the importance of autonomous defense, significantly increasing international demand for K-defense products. The company continues to grow steadily in major export markets such as Europe, the Middle East, and Southeast Asia, recently securing large-scale contracts that further solidify its position in the global defense market.

Continuous orders and export growth have greatly contributed to MNC Solution's solid performance and profit growth. Although the domestic defense market faces growth limitations due to defense budget constraints, a fixed customer base, and a lack of new business opportunities, exports generate high profitability through contract and unit price increases.

In this environment, expanding the export ratio has become a key driver of the company's growth. As of the third quarter of this year, export sales reached 98.6 billion KRW, accounting for 52.3% of total sales, surpassing domestic sales. This demonstrates the company's competitiveness in the global market beyond the limited domestic market. The cumulative sales for the third quarter recorded 188.5 billion KRW, a 78.6% increase compared to the same period last year (105.5 billion KRW). Operating profit during the same period grew 101.2% to 16.9 billion KRW, continuing steady external growth.

To sustain growth, the company is promoting not only the expansion of exports in its existing defense business but also a full-scale entry into the civilian sector.

In the defense business, steady growth continues by expanding exports of ground and guided systems mainly to Europe, the Middle East, and Southeast Asia. Especially due to global security crises such as the Russia-Ukraine war and Middle East conflicts, demand for K-defense products is increasing, and the company is strengthening its global market position through new contracts with key countries such as Poland, Romania, and the UAE.

Furthermore, the company plans to solidify its competitiveness by moving beyond indirect exports through system integration to direct exports to overseas defense companies and entering the aviation system business. In the ground system direct export sector, it plans to gradually expand its global market share by directly exporting to global major OEM MROs and overseas local OEM companies.

In the aviation system development sector, the company aims to secure mid- to long-term growth engines through the development of next-generation aircraft engines and medium tactical transport aircraft, maximizing sales potential by 2030. This strategy is expected to accelerate the company's global direct export expansion and entry into the aviation industry, further strengthening its position in the global defense market.

In the civilian business, the company is strengthening competitiveness in new business areas such as ▲ localization of servo valves for industrial machinery ▲ development of data center cooling systems ▲ control systems for wind power turbines by utilizing the spec-down design of defense servo valves. Through this, it plans to actively respond to localization demand in the civilian market and secure sales diversification and new growth engines based on high value-added product groups.

Alongside this, efforts continue to expand the technological capabilities accumulated in the defense industry into future-oriented fields. As the potential of innovative technologies such as unmanned aerial vehicles (drones) and satellite technology, alongside conventional weapons, has been proven through modern warfare, space technology is emerging as a core element of future warfare. Accordingly, as part of its long-term growth strategy, the company is laying the foundation in the aerospace sector and actively participating in government-led aerospace projects such as the development of satellite payload equipment and launch vehicle drive devices. These efforts aim to strengthen existing defense technologies while creating new growth engines.

To realize its mid- to long-term growth strategy, the company plans to focus the funds raised through this listing on facility investments such as purchasing and constructing a second plant site, expanding the R&D center, and replacing aging equipment. Through these investments, it intends to significantly enhance production capacity and further advance quality competitiveness. Additionally, to respond to rapidly changing technology trends and increasingly sophisticated customer demands, the company will actively recruit talented personnel and accelerate technology development and innovation, solidifying its position in the global market.

Kim Byung-geun, CEO of MNC Solution, stated, “The company has continuously captured new business opportunities that transcend the boundaries between civilian and defense sectors, alongside the stable expansion of existing businesses driven by the growth of K-defense. Through this listing, we will continue to grow as a global motion control specialist by advancing technology and expanding next-generation growth engines in aerospace and civilian businesses.”

Meanwhile, MNC Solution plans to offer 3 million shares in this listing. The expected offering price ranges from 80,000 to 93,300 KRW per share, with a total offering amount of 240 billion to 280 billion KRW. Demand forecasting will be conducted until December 2, followed by general subscription from December 5 to 6, aiming for a KOSPI market listing within the year. KB Securities is the lead underwriter for the listing.