[Click e-Stock] "Sphere Accelerates Aerospace and Nickel Businesses... Annual Sales to Reach KRW 400–500 Billion by 2027"

There is analysis suggesting that Sphere has secured a foundation for mid- to long-term growth, following a long-term supply contract with a global aerospace launch company and the full-scale launch of its nickel smelter business in Indonesia. With the aerospace and nickel businesses reflected in the company’s performance, Sphere’s sales are expected to grow in earnest from this year, reaching an estimated annual revenue of between 400 billion and 500 billion won by 2027.

On September 15, Shinhan Investment Corp. projected that Sphere’s sales growth would accelerate from 2026, driven by long-term supply contracts with a global aerospace launch company and its nickel smelter business.

Shinhan Investment Corp. analysts Heo Sungkyu and Lee Byunghwa stated, "It will be possible for Sphere to improve its performance as long-term supply contracts with a global aerospace launch company and the nickel smelter business are reflected in sales in earnest."

Sphere signed a long-term supply contract with a global aerospace launch company—initially for 10 years, with an additional 3-year extension possible. Annual sales of at least 110 million dollars are expected, and the company has secured orders exceeding 200 million dollars after 2025, indicating growing order volume.

The nickel business has emerged as a new source of revenue. Sphere made a strategic equity investment in a nickel smelter at the Morowali Industrial Park in Indonesia, carrying out the business through investment company Sphere Nickel Cobalt (SNC) and distribution company The Special Metals (TSM). Sphere holds 100% equity in both companies.

At the end of last year, SNC acquired a 10% stake in Excelsior International Investment (EII), the holding company for the smelter, for 240 million dollars. SNC’s structure allows it to be allocated profits according to its stake, calculated from the difference between the nickel selling price and refining costs at the smelter.

TSM purchases the nickel produced at the smelter and supplies it to mill vendors. By exercising an additional 10% option on top of its 10% basic allocation, TSM can secure up to 20% of output. It generates profit by capitalizing on the difference between the nickel purchase price and the sale price to mill vendors (offtake revenue).

The nickel smelter completed commissioning in May, finished production of nickel-cobalt mixed hydroxide precipitate (MHP) in July, and nickel cathode production in August. As a result, revenue from the nickel business is expected to begin being realized from the fourth quarter.

If the smelter operates stably, Shinhan Investment Corp. estimates it could generate approximately 700 million dollars in annual EBITDA. Of this, SNC’s equity-method earnings are projected at 70 billion to 100 billion won per year, and TSM’s offtake revenue is expected to be around 200 billion won.

The analysts project that both businesses will contribute even more significantly to performance from 2027. "Especially in 2027, with expanded contributions from the long-term supply agreement (LTA) and the nickel smelter, Sphere is expected to achieve annual sales of about 400 billion to 500 billion won," they forecast.

They further added, "Sphere’s revenue will begin to grow in earnest this year, and the pace of growth will accelerate even more through 2028."

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