Sena Technologies is raising expectations for improved earnings on the back of recovering demand from Harley-Davidson. Analysts said the company is also drawing attention for its potential to expand into a physical AI (artificial intelligence) corporations by pushing ahead with commercialization of an unmanned golf robot.
Hana Securities on the 29th maintained its "Buy (BUY)" rating on Sena Technologies and raised its target price to 80,000 won from 70,000 won. Sena Technologies closed the previous trading day at 41,750 won.
Kim Hong-sik, a Hana Securities researcher, said, "With rising device demand from major client companies, a steep profit increase is expected in the second quarter," and noted, "The medium- to long-term sales outlook is also positive thanks to the establishment of large-scale logistics and assembly lines in North America." He added, "Having recently succeeded in commercializing an unmanned golf robot, the company is making a full-fledged leap as a physical AI corporations."
Hana Securities projected that Sena Technologies' second-quarter earnings improvement will widen further. This is because demand from motorcycle clients, which account for more than 80% of sales, is expected to increase. The firm estimated second-quarter sales at 73 billion won and operating profit at 11 billion won. In the first quarter, it swung to a profit with operating profit of 3.8 billion won.
Kim said, "The first-quarter inventory assets of Harley-Davidson and Shoei, Sena Technologies' major clients, fell about 20% from a year earlier," explaining, "It appears to be due to proactive liquidation of older motorcycle inventory ahead of the peak season." He added, "Harley-Davidson's first-quarter global motorcycle sales also rose 8% year over year, confirming a recovery in Chonbang demand."
The medium- to long-term growth outlook is also considered bright. As about 80% of Sena Technologies' sales come from Europe and the United States, the company is moving to build large-scale logistics centers and final assembly lines in the United States. To that end, in Feb., it pursued a paid-in capital increase to raise 14.5 billion won for facility funds and 7.3 billion won for other working capital.
Kim said, "Given that the utilization rate of existing facilities is currently exceeding 100%, device production this year is expected to be around 150,000 units, a sharp increase from 60,000 last year." Hana Securities analyzed that, because the Sena brand has high global B2C recognition, expanding production capacity (CAPA) is highly likely to translate directly into sales growth.
Sena Technologies is also entering the robotics industry based on its proprietary mesh communication technology. Recently, it succeeded in commercializing an unmanned golf robot and plans to begin supplying to domestic golf courses at the end of this year, followed by global sales and rental businesses starting next year.
Kim said, "Given the nature of golf courses, it is not easy to build large-scale 5G SA/6G networks, and Sena's mesh technology, which enables swarm communications among robots, will likely serve as the first demand source where it can be put to good use," adding, "As the company plans to expand its supply scope to robots for logistics centers, a reassessment of its corporations value (multiple) as a physical AI corporations is expected soon."