[Edaily Reporter PARK MIN ] On the 26th, EUGENE INVESTMENT & SECURITIES analyzed that SANG-A FRONTEC CO., LTD.(089980)has entered a full-fledged earnings turnaround phase, driven by the expansion of its supply of components for large-capacity energy storage systems (BESS) in the U.S. and growth in sales of high-value-added materials to global satellite companies.

While maintaining its “Buy (BUY)” investment rating, the firm lowered its target price by 16.7% from 30,000 won to 25,000 won to reflect the widening discount to fair value following the recent stock market plunge. Based on the previous trading day’s closing price (13,340 won), the stock has an upside potential of 87.4%.

Han Byung-hwa, an analyst at EUGENE INVESTMENT & SECURITIES, stated in a report released today, “SANG-A FRONTEC CO., LTD.’s third-quarter consolidated revenue is estimated at 61 billion won, up 22% year-over-year, while operating profit is projected to rise 49% to 3.2 billion won.”

The components business division is the primary driver of these strong results. Third-quarter revenue from the components business is expected to reach 31.7 billion won, a 30% increase year-over-year.

Researcher Han noted, “Rising utilization rates at the U.S. production line for BESS cap assemblies and increased supply of gaskets for cylindrical batteries are driving earnings growth,” adding “Currently, one production line for ternary batteries in the U.S. is operating at a capacity utilization rate of 60–70%, and with the expansion of an additional line for lithium iron phosphate (LFP) batteries underway, new revenue is expected to materialize starting in the second half of next year,” the analyst pointed out.

SANG-A FRONTEC CO., LTD. plans to expand its U.S. plant to a total of four production lines; when the plant reaches full capacity in the second half of 2028, annual revenue from the U.S. plant alone is estimated to reach 200–240 billion won.

The supply of core materials for the aerospace sector is also showing rapid growth. SANG-A FRONTEC CO., LTD. supplies ETFE (fluoropolymer) film for receivers to the world’s largest satellite operator, and its market share in this segment is estimated to be over 80%.

One analyst noted, “Monthly sales of ETFE film for satellite receivers expanded from around 1 billion won in the second half of last year to 1.5 billion won in the first half of this year, and have recently reached as high as 2 billion won,” adding, “As our clients’ service areas rapidly expand into emerging markets and subscriber numbers surge, sales are expected to grow proportionally.” The analyst added, “Although sales of film for semiconductor packaging are still modest, we expect a subsequent increase in sales in line with the expansion of production lines by domestic semiconductor companies.”

Revenue from membranes (electrolyte membranes) is also projected to become a key growth driver in the future. The company is currently supplying samples to about 10 Chinese water electrolysis companies, and analysts expect this segment to become a major profit growth engine once these clients transition to mass production.

EUGENE INVESTMENT & SECURITIES estimated that SANG-A FRONTEC CO., LTD.’s annual revenue and operating profit for 2026 will reach 226.8 billion won and 11.4 billion won, respectively, representing year-over-year increases of 16% and 70%. For 2027, the firm projected revenue of 285.9 billion won and operating profit of 17.9 billion won, up 26% and 57%, respectively.

An analyst emphasized, “In 2027, when the expansion of K-batteries’ market share in the U.S. BESS market gains momentum, SANG-A FRONTEC CO., LTD.—which has proactively established local production lines—is positioned to benefit directly,” adding, “Despite its leap toward becoming a global leader in advanced materials and components, the current stock price is merely at a price-to-book ratio (PBR) of 1.”