[Click e-Stock] "SNT Energy Expected to See Valuation Upgrade on Middle East Sales and US Orders"

On July 11, LS Securities stated that "an upward revision in valuation is expected for SNT Energy, driven by rapid sales growth in the Middle East and additional order momentum in the United States."

Kim Saeryeon, a researcher at LS Securities, explained, "An air cooler is a device that releases heat using air, unlike water-cooled systems that use seawater. This makes it highly suitable for adoption in deserts or inland regions where water is scarce." Kim added, "As a result, SNT Energy has a high export ratio to the Middle East, and its major clients include leading Middle Eastern plant EPC (Engineering, Procurement, and Construction) companies such as TR, Technimont, Petrofac, and Samsung E&A." SNT Energy specializes in the design and manufacturing of air coolers and heat recovery steam generators (HRSG) used in oil and gas refining plants and petrochemical plants.

Kim noted, "Last year, SNT Energy achieved a record high by securing new orders worth 700 billion KRW in the Air Cooler segment alone." She further stated, "The order backlog, including HRSG, amounts to a total of 819.9 billion KRW, which is 2.8 times the company’s annual sales last year." Kim emphasized, "Amid aggressive upstream energy investments in the Middle East, the revenue contribution from the Saudi Gulf subsidiary continues to increase. Since the delivery period for Air Cooler orders is relatively short at about one and a half years, strong sales growth is expected to be secured over the next two years."

Additionally, Kim stated, "In December last year, SNT Energy received an Air Cooler order worth 71.9 billion KRW from Bechtel, the top LNG EPC company in the United States, for the Louisiana LNG project. In March this year, SNT Energy signed an additional supply contract worth 36.6 billion KRW for the same project." She assessed, "Amid the big wave in the US LNG market, additional orders are expected within the year, and SNT Energy remains attractive in terms of valuation compared to its US peers." Kim concluded, "Based on strong performance and additional orders, a re-rating of SNT Energy’s stock price is likely."