IBK Securities announced on August 10 that it has raised its target price for Sanil Electric from 180,000 won to 220,000 won, an increase of 22.2%. The firm maintained its 'buy' rating, citing expanding demand for special transformers driven by growth in sectors such as data centers, renewable energy, and energy storage systems (ESS).
Kim Tae-hyun, a researcher at IBK Securities, stated, "Following the formal vendor registration with Bloom Energy, subsequent orders for data centers are continuing. In Europe, new customer acquisitions are leading to increased orders in the renewable energy sector, suggesting sustained strong demand for special transformers. In the U.S. power grid market, demand for high-spec products is expanding, and efforts to secure new utility customers are underway."
Sanil Electric reported consolidated revenue of 164.2 billion won and an operating profit of 62.2 billion won for the second quarter, marking increases of 28.0% and 34.3%, respectively, compared to the same period last year, aligning with market expectations. The growth in sales of special transformers, driven by the expansion of the renewable energy, data center, and ESS sectors, led to a record quarterly revenue, with an operating profit margin improving by 1.8 percentage points to 37.9% year-on-year.
Notably, orders for data centers were identified as a key driver of performance growth. Revenue from special transformers for renewable energy, data centers, and ESS reached 132.4 billion won in the second quarter, a 51.7% increase from the previous year. In contrast, revenue from transformers for power grids fell by 30.6% to 26.6 billion won.
Order expansion is also ongoing. In April, Sanil Electric signed a supply contract for special transformers for Bloom Energy's U.S. data center worth approximately 50.3 billion won. New orders in the second quarter totaled 243.5 billion won, a 163.4% increase year-on-year, while the order backlog rose by 32.7% to 556.7 billion won. Special transformers accounted for about 90% of both new orders and the order backlog.
IBK Securities forecasts that revenue for the second half of the year will reach 374.2 billion won, with operating profit expected to be 133.4 billion won, representing increases of 36.1% and 40.6% year-on-year, respectively. Kim noted, "If related orders in the U.S. power grid market become visible in the second half, the contribution of transformers for power grids to performance is expected to increase next year."
* This article has been translated by AI.
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