Stock Price Up 72.6% This Year
Second Quarter Earnings Estimated to Exceed Market Expectations
Performance Improvement Driven by Increasing Exports to the United States
The stock price of Sanil Electric, an industrial transformer manufacturer, has been hitting all-time highs for several consecutive days.
According to the financial investment industry on August 4, Sanil Electric's stock price has risen by 72.6% since the beginning of this year. On August 1, the stock price reached as high as 122,600 won during intraday trading, setting a new record high since its listing. The market capitalization has surpassed 3.6 trillion won.
Previously, Sanil Electric was listed on the Korea Exchange on July 29 last year with an initial public offering (IPO) price of 35,000 won. Based on the IPO price, the market capitalization was 1.0656 trillion won. In just over a year since its listing, the market capitalization has increased by more than 2.5 trillion won.
Chief Executive Officer Park Dongseok holds 10,970,000 shares of Sanil Electric (a 36.02% stake). The value of his shares amounts to 1.2983 trillion won. According to financial information provider FnGuide, Park ranks 26th among individual stockholders in South Korea. The value of the shares held by Kang Eunsook, the second-largest shareholder, is calculated to be 691 billion won.
Sanil Electric is a company that manufactures power equipment such as special transformers and reactors. It supplies special transformers to companies such as General Electric (GE) and Toshiba & Mitsubishi Electric Industrial Systems Corporation (TMEIC). Continued strong performance has been driving the stock price upward. LS Securities estimated that Sanil Electric achieved sales of 128.1 billion won and operating profit of 46.1 billion won in the second quarter of this year. These figures represent increases of 70% and 88%, respectively, compared to the same period last year.
Sung Jonghwa, a researcher at LS Securities, stated, "By segment, sales from power grid and renewable energy appear to have increased by 125% and 35%, respectively, compared to the same period last year," and explained, "This is due to the rapid growth of the U.S. distribution market, driven by the electrification of manufacturing plants and the high growth of hyperscale data centers for generative artificial intelligence (AI)."
This trend of improved performance at Sanil Electric is expected to continue for the time being. Son Hyunjung, a researcher at Yuanta Securities, analyzed, "The proportion of Sanil Electric's sales directed to the United States is approximately 70%," and added, "As investments in the U.S. power grid are entering a full-fledged phase, Sanil Electric is rapidly strengthening its export competitiveness based on delivery reliability and quality."
Park Heecheol, a researcher at Heungkuk Securities, also projected, "At the time of last year's business plan, the expected average quarterly sales were about 80 to 90 billion won, but in the second half of this year, when the effects of capacity expansion are fully reflected, results are expected to exceed previous estimates." He emphasized, "We are now entering a phase where new investments in power generation sources are leading to additional demand for power equipment, and demand at a 100% utilization rate is expected to continue through next year."
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