[Click e-Stock] "Sanil Electric: Overwhelming Fundamentals but Excessive Undervaluation... Target Price Raised"

On September 3, LS Securities reported that, although Sanil Electric's fundamentals are outstanding, its valuation continues to be excessively undervalued. Accordingly, the target price was raised from 2.5 million won to 2.9 million won. The 'Buy' investment rating was maintained.

Sung Jonghwa, an analyst at LS Securities, explained, "Compared to the global average of companies in the electric power equipment industry, Sanil Electric posts overwhelming superiority in all fundamental indicators—including sales growth, profitability, the speed of profitability improvement, profit growth, capital growth, and capital soundness. This superiority warrants a significant valuation multiple premium reflecting the sustainability and stability of profit growth; however, in reality, Sanil Electric is trading at a considerable discount."

In the second quarter of this year, Sanil Electric posted a record quarterly order intake of 243.5 billion won, up 163% from the same period last year, surpassing the 200 billion won mark for the first time ever. Analyst Sung noted, "Large-scale order disclosures alone amounted to 92.9 billion won in the second quarter," adding, "In quantitative terms—such as absolute scale and year-on-year growth—as well as in qualitative terms—such as winning distribution transformer orders for power supply to U.S. hyperscale data centers and officially registering as a vendor for Bloom Energy, the largest onsite fuel cell power generation company in the U.S.—the second quarter performance was the best." He further commented, "While the 2026 order guidance remains at 700 billion won, taking into account the explosive order intake in the second quarter—a 61% increase in orders in the first half—and new large-scale orders announced in the third quarter, it is expected that actual orders will exceed guidance."

Previously, on August 20, Sanil Electric announced that it had signed an agreement with TMEIC USA to supply reactors for large-scale solar project inverters in the U.S. The contract value is 51.2 billion won. Analyst Sung stated, "This order surpasses the 50.3 billion won order for Bloom Energy’s fuel cell electric data center supply in April, once again marking the company's largest-ever single order."

In addition, on August 26, Sanil Electric disclosed the acquisition of a land plot measuring 33,000 square meters for the construction of its third dedicated 154 kV ultra-high voltage transformer plant. Analyst Sung explained, "Construction will begin in the first quarter of 2027, with commercial operations scheduled by 2028. The plant's annual sales capacity (CAPA) will be between 150 and 200 billion won." He added, "For reference, the second-phase expansion of Plant 2 is expected to add approximately 200 billion won in annual sales capacity and will focus on existing products."

This content was produced with the assistance of AI translation services.