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Dongsung Finetec: Order Backlog Expands by 3.3x over Past 4 Years
2021-12-08 [10:58:00]
Sales growth continues at Dongsung Finetec, with order backlog rising by 3.3x over the past four years. Backed by ongoing benefits from strengthened environmental regulations and hydrogen industry expansion, the firm should enjoy record-breaking earnings in 2022 and a turn to net cash in 2023.

Helped by continued sales growth, record-high earnings expected in 2022

Thanks to increased demand for LNG carriers, demand for related equipment is surging. Having climbed by 3.3x over the past four years, Dongsung Finetec’s order backlog now totals about W1tn. Compared to four years ago, the company’s sales volume has improved by 1.5x, in turn pushing up order backlog at the firm.

With robust order inflow continuing, shipbuilders are projected to achieve their largest order backlogs in history in 2H21 and break new sales records in 2022. At shipbuilders, orders continue to exceed production capacity.

Greater demand for eco-friendly ships and hydrogen industry growth to serve as mid/long-term momentum

Growing demand for LNG-powered ships is becoming evident. About 60% of Dongsung Finetec’s orders from domestic shipbuilders are now related to LNG-powered ships. Moving ahead, orders for insulation materials are forecast to accelerate amid rising orders at shipbuilders for container ships and tankers.

Liquid hydrogen storage technology for ships is also gaining momentum. Currently, Dongsung Finetec is conducting related technology research with a US company and making strong efforts to preoccupy the market, for example via patent application.

To turn to net cash financial position in 2023

We expect Dongsung Finetec to achieve a net-cash financial structure by end-2023, thanks to its explosive earnings growth. Based on its strong financial structure, the company is anticipated to pursue a strategy of top-line expansion via investment in new businesses and M&As. In addition to further expansion in gas-related businesses such as hydrogen/natural gas transport technology for ships, there is also the possibility of entering into new fields other than shipbuilding.
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