[Click eStock] "S1, AI CCTV Demand Increase and AI GOP Benefits Begin in Earnest"

iM Securities maintained a buy rating on S-1, forecasting solid business growth this year driven by increased demand for closed-circuit television (CCTV) systems.

S-1 reported a 10% year-on-year increase in sales to 763.5 billion KRW and operating profit of 52.3 billion KRW, up 13.9% year-on-year, in the fourth quarter of last year. Sales in the infrastructure services segment grew 16.1% year-on-year, supported by the expansion of new management scopes in building management services and integrated security businesses, as well as increased domestic and overseas projects in security SI.

Strong sales growth is expected to continue this year. Lee Sang-heon, a researcher at iM Securities, stated, "In the system services segment, demand for intelligent CCTV utilizing AI is expected to be significant," adding, "In the infrastructure services segment, sales growth is anticipated this year due to the expansion of new management scopes in building management services and the growth of defense projects in security SI."

He particularly highlighted the increased demand for AI CCTV following the enforcement of the Serious Accident Punishment Act. The researcher said, "S-1 equips intelligent CCTV with AI solutions trained on various scenarios and supplies them to various industrial sites, schools, and military units," and added, "As demand for accident prevention rises due to the enforcement of the Serious Accident Punishment Act, benefits are expected."

Benefits are also expected from the strengthening of front-line area security, such as the General Outpost (GOP). The Defense Acquisition Program Administration (DAPA) completed the electrification of surveillance cameras and control systems for the 22nd Division GOP and coastal units in December 2024. Building on the application to some units on the eastern front, a 465.1 billion KRW GOP Scientific Surveillance System Performance Upgrade project is set to begin, aiming to comprehensively upgrade the performance of front-line area surveillance systems.

The researcher explained, "Companies related to this project are submitting bid proposals this month, and after evaluations, DAPA will finalize contracts with the successful bidders," adding, "Since the GOP Scientific Surveillance System Performance Upgrade project requires leveraging know-how from the minor performance upgrade project of the GOP Scientific Surveillance System, this could work in favor of S-1 in terms of contractor selection."