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Wonil T&I Prepares for a New Leap with KOSDAQ Listing
Wonil T&I, which possesses expertise in liquefied natural gas (LNG) and hydrogen energy, will be listed on KOSDAQ, seeking new growth opportunities.
With over 35 years of experience, Wonil T&I has expanded its business from gas equipment to LNG, nuclear power, and the future energy source of hydrogen. The company is expected to play an important role in the energy transition era due to its unique technological capabilities.
In particular, Wonil T&I has successfully localized high-pressure combustion vaporizers (SCVs) in South Korea, maintaining a 100% market share for 10 years. Additionally, its mass production technology for hydrogen storage alloys (MH), which is rare globally, is a major competitive advantage for the company.
The upcoming IPO will serve to reaffirm the company's technological excellence and is expected to be a critical foundation for future growth.
Company Overview and Core Technologies
Wonil T&I was established in 1990 under the name 'Wonil Industry' and changed its name to its current title in 1998 upon transitioning to a corporation. The company focuses on the development, manufacturing, and sales of core equipment related to LNG and hydrogen energy. It continually expands its business scope to adapt to the changing energy paradigm.
In the LNG solutions sector, Wonil T&I has successfully localized high-pressure combustion vaporizers (SCVs), recording a 100% market share in the domestic market for the last ten years. SCVs are equipment that convert ultra-low temperature LNG at -162°C into natural gas (NG) at room temperature, demonstrating high thermal efficiency and eco-friendliness. Moreover, it exclusively supplies BOG re-liquefaction systems, which condense boil-off gas (BOG) produced during the storage and transport of LNG, contributing to the operational efficiency of LNG terminals.
Wonil T&I plans to continue leading innovation in the energy industry and strive to provide sustainable energy solutions.
In the hydrogen solutions sector, there is a company with unparalleled technological expertise. This company uniquely possesses mass production technology for hydrogen storage alloys (MH) in South Korea, developing a method to safely store hydrogen in solid form. The MH technology has the significant advantage of being much less explosive than high-pressure gas storage methods while providing higher storage density, and its excellence has been recognized through its exclusive supply to the air-independent propulsion (AIP) systems of 'Jangbogo-III class submarines.
Furthermore, the company has secured hydrogen reformer technology capable of extracting high-purity hydrogen from natural gas. It has experience supplying this technology to various hydrogen production bases and refueling stations, such as in Pyeongtaek and Ansan, and is actively developing blue hydrogen production technology linked to carbon capture, utilization, and storage (CCUS). These efforts contribute to Wonil T&I building a comprehensive technological portfolio from hydrogen production to storage.
Financial Performance and Securing Stability
Wonil T&I faced challenges during the corporate rehabilitation process in 2014 but successfully overcame them and normalized its management.
The recent financial performance clearly demonstrates this resilience. In 2024, sales are expected to reach 42.19 billion won, maintaining the previous year's level. However, operating profit is expected to increase significantly by 122.8% to 6.38 billion won compared to the previous year. Additionally, net profit is projected to rise dramatically by 334.8% to 7.87 billion won, highlighting an improvement in profitability.
This performance is attributed to restructuring the portfolio around high value-added products and completing the repayment of rehabilitation debts. The future outlook for Wonil T&I appears even brighter.
The debt ratio was 178.1% in 2022 but is expected to decrease to 102.1% in 2024, significantly improving financial stability. This change has contributed to forming a stable financial structure.
IPO Details and Fund Utilization Plan
Wonil T&I is pursuing an IPO to be listed on the KOSDAQ market, with NH Investment & Securities acting as the main underwriter.
The offering involves a total of 1,200,000 shares, consisting of 1,000,000 new shares and 200,000 existing shares. The proposed offering price is set between 11,500 won and 13,500 won, with the final confirmed offering price being 13,500 won, which is at the upper end of this range.
The demand forecasting competition for institutional investors reached a remarkable ratio of 1308.07 to 1, and the subscription ratio for the general public offering was also high at 1312.21 to 1.
The total amount raised is approximately 16.2 billion won, and the planned listing date is set for May 9, 2025.
The funds raised from the new share issuance through this IPO, estimated at around 13.5 billion won, will be focused on strengthening the capabilities of the hydrogen business as the main growth driver of the company.
Specifically, around 3 billion won will be invested to increase the production capacity of hydrogen storage alloys, and approximately 1.6 billion won will be allocated for hydrogen charging and discharging equipment for performance testing of hydrogen storage cylinders for submarines. Additionally, funds will also be directed towards research and development (R&D) for the development of next-generation hydrogen storage technologies and the commercialization of large and medium hydrogen reformers and CCUS technologies.
These investment plans clearly demonstrate the company's intention to make the hydrogen business a core growth engine for the future, establishing a leading position in the market.
Growth Strategy and Market Outlook
Wonil T&I plans to accelerate its expansion into the hydrogen market based on its stable liquefied natural gas (LNG) business.
There are plans to expand the application of MH storage technology to various fields, including not only submarines but also construction machinery (e.g., forklifts, excavators), hydrogen energy storage systems (H-ESS), and vessels. Furthermore, the company aims to focus on developing next-generation hydrogen storage materials with higher storage efficiency, such as Alane.
Additionally, it sets out to commercialize the currently developing large and medium hydrogen reformers and carbon capture and utilization (CCUS) technology to formally enter the blue hydrogen market. These development plans will be significant factors driving sustainable growth and innovation for Wonil T&I.
The continuously increasing global LNG demand serves as a significant opportunity. The company plans to solidify its position in existing overseas markets further while opening new markets to expand the supply of SCV and LNG facilities. Through this strategy, Wonil T&I aims to sustain stable growth.
Additionally, the strengthening carbon neutrality policies and the activation of the hydrogen economy globally are expected to provide a positive environment for Wonil T&I. As a result, the company's growth potential is expected to increase even further.
Key Investment Risks
The growth potential of Wonil T&I is very attractive. However, there are risk factors to consider before investing. As of 2023, the revenue dependency on two major clients, Hanwha Ocean and POSCO E&C, is 81.1%, which could be a significant concern. Any changes in these companies' order performance could notably impact the company's overall performance.
Additionally, due to the nature of project-based businesses, there may be considerable volatility, and domestic and international competition in the SCV and hydrogen reformer markets is intensifying. Moreover, the company's history of undergoing corporate rehabilitation procedures is a critical factor to consider when making investment decisions. A comprehensive review of these aspects and a cautious approach are necessary.
Conclusion and Investment Outlook
Wonil T&I is a company with exceptional technological capabilities in LNG and hydrogen fields. In the significant trend of energy transition, the company has high growth potential. A clear improvement in performance is expected in 2024, and the process of securing necessary funds through a successful IPO will provide positive momentum. The high market interest is evident through demand forecasting and subscription competition ratios, and the relatively low volume of initial distribution is likely to positively impact the stock price at the beginning of the listing.
In the long term, the successful expansion of the hydrogen business, funded by IPO resources, will be essential. This will be a major factor determining the company's value through customer diversification and sustained growth.
While investors are hopeful about the company's technological prowess and growth potential, they must also sufficiently understand the risk factors, such as customer concentration, competitive environment, and past financial history. Thus, a balanced perspective is necessary. Moreover, it is crucial to continuously monitor the company's performance changes and growth strategy progress post-listing.
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