[Click eStock] “SNT Energy, Earnings Expected to Soar Driven by North American LNG Market Growth”

Daishin Securities analyzed on the 20th that SNT Energy will show a steep performance growth due to the expansion of the North American LNG market.

Park Jang-wook, a researcher at Daishin Securities, explained in a report on the same day, "SNT Energy is a company that manufactures and supplies fin-tube type air-cooled heat exchangers, and the air cooler segment accounted for 81.4% of the annual sales last year, establishing itself as the main business."

While SNT Energy's sales have been predominantly from the refining and chemical plant sectors, it has recently been driving performance centered on the North American LNG market. Air-cooled heat exchangers are essential equipment used to condense compressed propane during the LNG precooling process.

Researcher Park analyzed, "As of 2024, the proportion of sales to North America is 25%, and more than 60% of that comes from LNG-related sales." SNT Energy's main competitors are global companies such as Kelvion and Hudson Products.

SNT Energy is also engaged in the HRSG (Heat Recovery Steam Generator) business. HRSG is a combined waste heat recovery power generator that plays a role in improving the energy efficiency of combined cycle power plants.

The global LNG market expansion is a positive factor for SNT Energy. According to the GECF (Gas Exporting Countries Forum), global LNG export volume is expected to increase from 408 Mt in 2023 to 800 Mt in 2050. In particular, North America and the Middle East are expected to establish themselves as key exporting regions. Researcher Park stated, "An increase of 130 Mt and 106 Mt in LNG exports is expected from North America (United States, Canada, Mexico) and the Middle East, respectively."

In fact, as of last month, LNG exports from the North American region reached 18.06 Mt, marking a 3.5% increase compared to the same period last year and setting a record high for February. This increase is due to the expansion of LNG exports from the United States, influenced by the operational expansion of the Corpus Christi, Freeport, and Plaquemines LNG facilities. Accordingly, SNT Energy's sales to North America surged by 843%, from 8.1 billion KRW in 2023 to 76.4 billion KRW last year.

Riding this trend, SNT Energy is expected to continue strong performance this year as well. Researcher Park said, "This year's expected sales are 526.4 billion KRW (+78.9% year-on-year), operating profit is expected to reach 59.5 billion KRW (+167.4% year-on-year), and new orders are expected to be 661.5 billion KRW." He added, "New orders are 1.2 times the sales, and order backlog is at 1.8 times, indicating sustained solid growth."

However, it is necessary to consider the burden of high valuation. Researcher Park advised, "The expected price-to-earnings ratio (P/E) for this year is around 15 times, and I recommend a buying strategy when it adjusts to this level."