[Click e-Stock] "CS Bearing, Earnings Rising on Onshore Wind Alone"

Target Price Set at 9,900 Won

On the 26th, DS Investment & Securities maintained a Buy rating on CS Bearing and set a target price of 9,900 won.

Ahn Juwon, a researcher at DS Investment & Securities, stated, "The current share price is trading at 13 times the price-to-earnings ratio (PER) based on expected earnings, and a share price rebound is fully possible." He estimated last year's results at 144.4 billion won in revenue and 18.1 billion won in operating profit. These figures represent increases of 14.5% and 62.9%, respectively, compared with the previous year. As the background for this earnings growth, he cited solid demand centered on onshore wind power in regions such as the United States and Europe, as well as rising market share. He explained that while CS Bearing has maintained a market share of about 70% within its key client GE, its revenue from Vestas has increased since last year.

Ahn commented, "Over the next five years, even if there is no significant growth in the onshore wind power markets in the United States and Europe, they will still serve as power sources capable of responding to the overall increase in electricity demand," adding, "In offshore wind power, it will take time for the market to grow, while in onshore wind power, turbine sizes are increasing, which is pushing up unit prices, and due to price and political risks, European and Chinese supply chains are continuing to lose market share." He went on to say, "Korean companies will fill this gap, which is creating a backdrop for growth."

Based on the high utilization rate of its production plant, he projected that CS Bearing's earnings will remain solid. Ahn stressed, "CS Bearing's production plant is located in Vietnam, and it is targeting a utilization rate of 85% last year and 90% this year, which is effectively full capacity," adding, "Although the wind power industry is not as booming as in the past due to high interest rates and the United States' quasi-anti-renewable energy policy stance, CS Bearing is demonstrating that the industry is more resilient than the market expects."

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