[Click e-Stock] "Sphere's Cumulative Orders Reach $210 Million... Growth Expected from Starship Mass Production and Nickel Business"

Kyobo Securities said Sphere is entering a phase in which it is turning an increase in orders into stronger earnings. It expects expanded supply volumes as Starship shifts to mass production, along with revenue from its nickel business in Indonesia, to drive growth.

In its report, "2027 Annual Outlook: Go for Orbit," published on November 11, senior researcher Kwon Oh-hwi maintained a "Buy" rating on Sphere.

According to the report, Sphere's cumulative order backlog as of the end of October 2026 is estimated at approximately $210 million. This is 190% above its customer's initial demand forecast and also represents a 190% increase from the previous year.

"As Starship shifts to mass production, Sphere is entering a phase in which both supply volume (Q) and market share (M/S) are increasing," Kwon said. He also cited the expansion of the company's business through the establishment of a local supply chain as a factor supporting growth.

Kwon also forecast that earnings improvement would gather pace. Sphere's third-quarter revenue is expected to rise 239% year on year to KRW 71.6 billion, while operating profit is projected to reach KRW 3.3 billion, marking a return to profitability. Full-year revenue is forecast to increase 194% year on year to KRW 280.8 billion.

Sphere's nickel business in Indonesia is also drawing attention as a new growth driver. The ENC nickel smelter in Indonesia, in which Sphere has invested for a 10% stake, obtained an industrial business license (IUI) for commercial sales on October 29. The report expects the company to begin recognizing revenue in November. It said that securing rights to offtake 7,200 tons of nickel annually has established a basis for approximately KRW 180 billion in new revenue.

Sphere could also benefit from bottlenecks in the supply of specialty alloys. Kwon said that while the U.S. aerospace manufacturing production index has recovered to its pre-COVID-19 level, lead times for nickel alloys have stretched to more than 40 weeks. Sphere is responding to customers' needs for shorter lead times and high quality by leveraging a network of more than 20 global manufacturing vendors.

Another competitive advantage, the report said, is that Sphere works with customers on product development and validation from the early stages of materials development. Given the high technical barriers and certification processes, replacing existing suppliers would be difficult.

"By integrating the supply chain from sourcing high-purity Class 1 nickel through Indonesia's ENC, to mill-vendor manufacturing and final delivery, Sphere should be able to improve the stability and competitiveness of its raw-material procurement," Kwon said.

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