[Click e-Stock] "Spear, A Key Partner Of SpaceX"

On the 9th, SK Securities analyzed Spear as "a specialty alloy solution company based on supply chain management (SCM) that is specialized in the aerospace industry," adding that "its mid- to long-term growth potential is also high as its clients, including SpaceX, move into mass-production phases." The brokerage did not provide an investment rating or target price.

On this day, Heo Seonjae, an analyst at SK Securities, stated, "Spear has built a business model that goes beyond simple material distribution to perform in an integrated manner everything from raw material sourcing to quality control and delivery scheduling through its global vendor network."

He particularly focused on the company’s linkage with SpaceX, the U.S. private space development company. Spear is one of SpaceX’s top five primary suppliers and the only one based in Asia.

As SpaceX rapidly increases its launch frequency with the goal of commercializing its next-generation launch vehicle Starship, structural growth in demand for specialty alloys, which require large material input per launch vehicle, is expected.

Analyst Heo said, "Through a 10-year long-term supply contract worth about 1.5 trillion won, Spear has effectively already secured a minimum annual volume," adding, "Since the expansion of production by its clients translates directly into earnings growth, the company has high revenue visibility."

Last year, Spear also established a stable procurement structure for nickel, a strategic mineral, by acquiring a 10% stake in the operating entity of a nickel smelter in Indonesia for a total of 240 million dollars (about 320 billion won). The smelter has an annual production capacity of 72,000 tons, giving Spear the right to procure 7,200 tons of nickel per year.

Analyst Heo said, "Given that it can procure raw materials at about 50% of the London Metal Exchange (LME) price, an annual cost-saving effect of more than 15 billion won is expected," adding, "Additional improvements in cash flow through equity-method gains and dividend income are also likely to materialize going forward."