[Click e-Stock] Expanding From Defense to Robotics and Data Centers... The Precision Processing Company to Watch Next Year

The securities industry is paying close attention to Daesung Hi-Tech as a promising stock for next year. Daesung Hi-Tech specializes in precision processing, including precision components and Swiss-type automatic lathes. Considering the company’s expansion into areas such as defense, robotics, and artificial intelligence (AI) data centers, analysts believe its current share price is undervalued.

On October 7, Oh Hyunjin, a researcher at Kiwoom Securities, stated, "The results from new business operations are expected to materialize in earnest starting at the end of this year and into next year. Although the stock price declined due to weak short-term earnings, it is currently undervalued given the company’s future growth potential."

Daesung Hi-Tech is expected to see growth in its precision components segment, especially those focused on defense. Oh noted, "In December last year and again in March this year, the company announced new orders worth 33 billion won related to aircraft weapon system components for overseas customers. These orders should be reflected in results between the second quarter of this year and the first quarter of next year, and there is a high probability of follow-up orders." He added, "Many countries have recently begun accumulating inventories of aircraft weapon systems, and this stockpiling cycle is expected to continue for several years. This will likely allow Daesung Hi-Tech to expand its client base, leveraging its know-how in mass production."

With the recognition of revenue from the defense segment, the company is expected to return to operating profitability. Daesung Hi-Tech’s sales this year are projected to reach 116.1 billion won, up 22 percent year-on-year, and operating profit is forecast at 1.6 billion won.

The full-scale growth trend is likely to become more visible next year. Oh pointed out that, beyond expectations for additional defense orders, there are also anticipated results in the robotics and AI data center sectors. "We are working with various robotics companies on original equipment manufacturing (OEM) and supplying related components, and we are also expanding our business in supplying cooling parts and equipment for AI data centers," he said. Oh further explained that the emergence of results from these new businesses is expected to have a significant positive impact on profitability.

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