IBK Securities noted on the 11th that DASAN Networks could be re-evaluated beyond the telecommunications equipment business to the value chain of the U.S. liquefied natural gas (LNG) development project. IBK Securities did not provide an investment opinion or target price for DASAN Networks.
Researcher Jo of IBK Securities pointed out that DASAN Networks is included in the U.S. LNG value chain due to DTS, which was consolidated as a subsidiary from the fourth quarter (October to December) of last year.
According to Researcher Jo, DTS is a company that designs and manufactures specialized heat exchangers used in power plants, petrochemical facilities, and LNG plants. One of DTS's main products, the Air Cooler, is a key equipment that controls heat generated from LNG facilities.
Researcher Jo said, "DTS is one of the few domestic companies that can perform both the design and production of air coolers in-house," adding, "It appears to have a track record of supplying air coolers for large LNG projects in the U.S."
In the first quarter (January to March) of this year, DTS accounted for 21.6% (25.2 billion won) of DASAN Networks' total sales and 44.3% (3.58 billion won) of operating profit on a consolidated basis. Researcher Jo explained that while DTS's share of DASAN Networks' total sales is still small, there is ample growth potential because the U.S. has recently accelerated LNG projects to strengthen energy security.
Researcher Jo noted, "The major project being carried out by U.S. LNG developer Venture Global could be the foundation for expanding DTS's performance," adding, "DTS has already secured a supply history for the Phase 1 project previously promoted by Venture Global and has also received the contract for the Phase 2 project."
He continued, "DASAN Networks has been recognized in the market as a telecommunications equipment corporation, but following the incorporation of DTS, it has expanded its performance reflection range to include U.S. LNG export facilities," and emphasized, "It is necessary to reassess it as another promising investment option that can enter the U.S. LNG value chain."