[Click eStock] "Powernet Accelerates Transformation into Comprehensive Power and Energy Solutions Company"

On May 28, Hanyang Securities analyzed that Powernet is achieving record quarterly results as it accelerates its new business initiatives, positioning itself as a comprehensive power and energy solutions company.

Powernet, whose main business is the production of SMPS (switched-mode power supplies), has maintained stable growth in the power supply market, which demands both technological expertise and reliability, since its listing on the KOSDAQ in 2018. SMPS, a key component that converts AC power to DC and is essential for electronic devices such as TVs, monitors, and home appliances, is part of an oligopolistic market with high entry barriers.

Since being registered as a partner of Samsung Electronics in 2001, Powernet has maintained business relationships with Samsung Electronics and Coway for over 20 years. Recently, it has expanded its customer base to include domestic cosmetics brands and major household goods distributors. As of last year, the home appliance segment accounted for 84.4% of total sales, with sales to Samsung Electronics and Coway making up about 85% of the total.

Recently, Powernet has been accelerating its new businesses in EMS (electronics manufacturing services) and batteries, thereby broadening both its product portfolio and customer base. The operation of its second plant in Vietnam has further strengthened its growth foundation by enhancing production efficiency and cost competitiveness.

The EMS business has expanded beyond simple component supply to the production of complete product sets such as air purifiers. It is understood that Powernet has secured stable full-process production lines through strategic collaboration with local companies in Vietnam. This enables the supply of higher-priced set products, which is simultaneously improving both overall sales volume and profitability. In the battery business, Powernet is supplying small packs based on lithium iron phosphate (LFP) batteries mainly to domestic cosmetics brands, and is expanding its product lineup to include swappable battery packs for electric motorcycles and large packs for ESS (energy storage systems).

Lee Joonseok, a researcher at Hanyang Securities, stated, "Powernet is accelerating its transformation into a comprehensive power and energy solutions company, leveraging the stability of its existing SMPS business while positioning EMS and battery businesses as future growth drivers."

In the first quarter of this year, Powernet achieved record consolidated results, with sales of 106 billion won (up 98.9% year-on-year) and operating profit of 4.4 billion won (up 70.0%), marking its highest-ever quarterly performance. This was the result of the full-scale contribution of premium SMPS sales, as well as the inclusion of new business revenues from the EMS and battery sectors. The effects of production efficiency improvements at the second Vietnam plant also became apparent, leading to improved profit margins.

Additionally, on May 23, Powernet finalized a B2C supply agreement with the largest household goods distributor in Korea, and related sales are expected to begin in earnest from the second half of the year. Researcher Lee Joonseok commented, "Although the first quarter is generally considered an off-season, this quarter showed a different trend as visible results from new businesses and customer diversification were reflected in the results." As the year progresses, the potential for further performance growth is increasing, and there is also analysis that the current stock price is undervalued based on earnings indicators.