CTT Research Analysis Report "Big Cycle of Ukraine Reconstruction Begins"
Distribution Volume at 20.04%... No Overhang Concerns
Benefiting from US $1.2 Trillion Infrastructure Investment Bill Passage
CTT Research forecasted on the 20th that next year will be the first year of the big cycle of Ukraine reconstruction, and sales related to reconstruction for Jeonjin Construction Robot are expected to grow explosively. They also emphasized that despite being a newly listed company with a free float of 20.04%, there is no concern about overhang (potential large-scale selling pressure).
CTT Research explained, "The cost required for Ukraine reconstruction after the Ukraine-Russia ceasefire varies depending on the estimating agency, but it is estimated to be over 700 trillion KRW."
They added, "The actual cost is expected to be even higher than the estimate made earlier this year," and "The new sales revenue from concrete pump cars (CPC) generated by Ukraine reconstruction is estimated to be between 310 billion and 620 billion KRW."
CTT Research emphasized, "Ukraine requires reconstruction across the entire territory and the period is long-term, lasting more than 10 years," and "The new CPC sales revenue for Jeonjin Construction Robot is expected to be much larger."
Furthermore, they predicted, "Along with domestic export responses, production at a local factory in Poland and supplying finished products will be carried out simultaneously, enabling rapid volume response, reducing logistics costs, and providing advantages in operating profit margin through high-margin finished product sales."
CTT Research also analyzed, "The United States passed a bill in 2021 that includes an investment of 1.2 trillion USD over 8 years," and "Since CPC is essential for most infrastructure projects such as road and bridge repairs and public transportation improvements, it acts as a driving force for performance improvement." They added, "North America accounts for 41.5% of Jeonjin Construction Robot’s sales, the largest share, and since margins are higher than domestic sales, it leads to an increase in operating profit margin."
Jeonjin Construction Robot’s largest shareholder is Motrex Jeonjin No.1 Co., Ltd., holding 74.5%, and the company holds 5.46% as treasury stock. During the initial public offering (IPO), only 100% secondary shares were sold. Most newly listed companies face selling pressure from venture capital (VC) investors after listing, which burdens the stock price. However, Jeonjin Construction Robot has not received any VC investment, so there is no overhang. CTT Research judged, "With only 20.04% free float, when the stock price rises, a volume lock-up phenomenon will occur, showing the typical characteristics of a sold-out stock."
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