[Edaily Reporter Shin Ha-yeon ] “While the construction of data centers is a bottleneck, the next bottleneck will be in the energy sector. Emerging industries such as robotics and autonomous vehicles ultimately rely on energy to operate, and it is impossible to gauge just how far this sector will expand. Our growth strategy is structured around sequentially adding new growth businesses on top of a stable core business.”

Kim Joong-il, CEO of TSE CO.,Ltd, made these remarks on the 8th during an initial public offering (IPO) press conference held in Yeouido, Seoul, emphasizing investment opportunities in energy facilities driven by the expansion of the AI industry. He explained that as energy demand increases due to the growth of new industries, investment in power generation infrastructure and thermal management facilities to support this demand will also expand.

CO

Ltd

Founded in 2000, TSE CO.,Ltd designs and manufactures air-cooled heat exchangers (AFCs), which cool process gases and liquids using outside air, and air-cooled steam condensers (ACCs), which cool steam that has passed through a turbine and convert it back into water. Last year, these two products accounted for 93.6% of the company’s revenue, with LNG liquefaction facilities, refining and petrochemical processes, and combined-cycle power plants serving as the primary markets.

The company’s competitive edge lies in its thermal design technology tailored to the operating conditions of each project and its global customer network. Leveraging its proprietary thermal design software and fin technology—which enhances heat transfer performance—the company handles everything from design to manufacturing and inspection. As of the end of June this year, it has completed a cumulative total of 284 projects across more than 30 countries and is registered in the supply chains of 15 of the world’s top 20 engineering, procurement, and construction (EPC) firms.

CEO Kim stated, “We have recorded up to 27 consecutive repeat orders from the same end-user and up to 15 consecutive repeat orders from the same EPC firm.” He explained that the practice of returning to suppliers proven in large-scale plant projects underpins these follow-up orders. Last year, overseas sales accounted for 89% of total revenue.

Increased investment in energy infrastructure is driving earnings growth. Last year, revenue reached 142.7 billion won and operating profit reached 25.1 billion won, up from 75.8 billion won and 13.3 billion won, respectively, in 2023. In the first half of this year, revenue totaled 79.1 billion won and operating profit reached 15.0 billion won, representing year-over-year increases of 26.2% and 42.9%, respectively. The operating profit margin stood at 19.0%.

A new growth driver is the dry cooler for AI data centers. This equipment dissipates the heat from cooling water—which has been heated during the chip cooling process—into the outside air. CEO Kim explained, “The key is that the enormous amount of heat absorbed by the cooling water inside the server must be dissipated outside the building,” adding, “Our dry cooler is the core equipment responsible for this heat dissipation to the outside air.” The company plans to target domestic and international data center markets by leveraging its existing thermal design technology and ultra-low-noise design.

Actual revenue is expected to begin in 2029. CEO Kim stated, “At this stage, the discussions are more in the planning phase rather than the actual order placement phase,” adding, “We expect to actually sign contracts sometime next year or early the year after.” Currently, the company is providing technical documentation and conducting sales outreach to major construction firms.

Waste heat power generation is expected to contribute to the company’s earnings even sooner. Last July, the company signed a commercial supply contract for a 1.5-megawatt (MW) organic Rankine cycle (ORC) waste heat recovery power generation system. ORC is a technology that generates electricity by driving a turbine using low- and medium-temperature industrial waste heat. The company handles the entire process, from heat source analysis to the manufacture of core equipment and system integration.

CEO Kim stated, “Since the products have actually been delivered and revenue has been generated, it is highly likely that revenue will be recognized next year,” adding, “We plan to diversify our applications into geothermal and biomass power generation.”

In the short term, the company will focus on securing additional orders for its existing business. The order backlog at the end of the first half of the year stood at 129.3 billion won. The company plans to secure orders worth approximately 90 billion won in the fourth quarter, and if everything proceeds as planned, the year-end order backlog is expected to reach about 140 billion won. However, there is a possibility that some orders may be carried over to the first quarter of next year.

Proceeds from the public offering will be used for working capital required to execute projects and for capital expenditures. The company’s four factories in Gunsan, Jeonbuk, have the capacity to handle projects worth approximately 200 billion won annually, and this year, the company introduced nine robotic welding automation systems. Of the proceeds from the public offering, approximately 5 billion won has been allocated for capital expenditures related to existing businesses, and approximately 6 billion won for new business ventures. CEO Kim stated, “Since we invested approximately 20 billion won this year to expand our factories and other facilities, we plan to invest the proceeds from the public offering primarily in machinery and demonstration facilities.”

Meanwhile, DTS CO.,Ltd is offering all 2,228,917 shares as new shares. The target offering price ranges from 17,000 to 18,500 won per share, with the expected offering amount totaling approximately 37.9 to 41.2 billion won and the estimated market capitalization ranging from approximately 252.6 to 274.9 billion won. After conducting a bookbuilding process with institutional investors through today, the company will accept public subscriptions on the 13th and 14th. The company aims to list on KOSDAQ by the end of October, with DaishinSecurities serving as the lead underwriter.