AMOSENSE's First SOFC Capacity Expansion Is Just the Beginning... Focus on Bloom Energy's 5 GW Expansion

[Financial News]  AMOSENSE's solid oxide fuel cell (SOFC) business supplying Bloom Energy in the United States is expected to enter another growth phase after its first capacity expansion. This is because Bloom Energy is expected to need approximately 200 million substrates annually if its production capacity expands to 5 GW by 2027. Analysts say the key to a revaluation of the company's value will be how much of the growing future volume it can secure, rather than simply bringing in a new supplier.
On the 6th, Research Al-eum initiated coverage of AMOSENSE with a 'positive' rating and a target price of KRW 13,800. The upside from the current share price is 74.7%.
Kim Do-yoon, a researcher at Research Al-eum, highlighted Bloom Energy's expanding production capacity. Bloom Energy's capacity is expected to increase from its current level of approximately 1 GW to 2 GW this year and 5 GW in 2027. If the 5 GW production system becomes a reality, annual demand for SOFC electrolyte substrates is estimated at approximately 200 million units.
AMOSENSE is currently conducting final checks on its expansion of SOFC electrolyte substrate production for Bloom Energy. The schedule has been delayed somewhat from the initially targeted third quarter of this year because of detailed verification for the establishment of a large-scale mass-production system. However, supply expansion is expected to begin in earnest once the checks are completed.
The industry's focus is on the potential increase in volume after this expansion, rather than on the expansion itself. If Bloom Energy's production capacity increases another 2.5-fold, from 2 GW to 5 GW, the volume of substrates it procures will inevitably grow significantly as well. Kim said, "As AMOSENSE has entered the market as the third supplier after existing Chinese and Japanese companies, it appears likely to secure additional volume as the supply chain diversifies." He added, "SOFC substrates are considered products capable of generating double-digit margins, so they are expected to improve profitability as well as expand revenue." 
In addition, the automotive electronics business is approaching an inflection point in earnings. AMOSENSE is expanding beyond its existing smartphone- and smart-key-focused operations into integrated control modules for automotive applications that combine software and hardware. Kim said, "Mass production of related modules in line with Hyundai Motor Group's transition to software-defined vehicles (SDVs), along with SmartTag3 orders, is expected to support top-line growth."
Meanwhile, Research Al-eum estimates that AMOSENSE's consolidated revenue in 2027, when its SOFC and automotive electronics businesses are expected to ramp up simultaneously, will rise 40.2% year on year to KRW 160 billion. Operating profit is projected at KRW 10.5 billion, marking a return to profitability.
Kim calculated a target price of KRW 13,800 by applying a target price-to-earnings ratio (P/E) of 24 to the projected 2027 earnings per share (EPS) of KRW 575. He said, "Beyond its existing businesses, attention should be paid to the process in which SOFC and integrated modules for automotive applications establish themselves as new growth engines." 


[email protected] Kim Kyung-a Reporter