SK Securities on the 17th forecast that Sanil Electric will see earnings start to climb in earnest this year as data center orders expand. It kept its "buy (BUY)" rating and raised its target price to 250,000 won from 220,000 won. Sanil Electric's previous trading day closing price was 189,000 won.
SK Securities projected Sanil Electric's first-quarter revenue this year at 148 billion won and operating profit at 54.4 billion won. Those would be up 49.8% and 44.9%, respectively, from a year earlier. It forecast an operating margin of 36.7%.
Na Min-sik, an analyst at SK Securities, said, "As the utilization rate of the second plant gradually expands, top-line growth based on capacity (CAPA) expansion is appearing," and added it "is expected to continue increasing profits through a favorable exchange rate and economies of scale."
In particular, demand related to data centers was expected to serve as the key growth driver this year. Analyst Na explained, "Inclusion in the data center value chain will become visible through supply to major players such as data center developers and EPC firms, as well as orders for transformers installed internally," adding, "From the second quarter, transformers for data centers destined for EPCs are expected to be fully reflected in results."
Along with this, the renewable energy sector is expected to sustain steady orders and revenue growth, while the power grid sector is expected to turn around starting in the second half.
The impact of U.S. tariffs was seen as limited. Analyst Na said, "Since Sanil Electric's main product is distribution transformers, the impact of changes in the U.S. tariff policy centered on ultra-high-voltage transformers applied from April will not be significant."