Sphere’s cumulative orders reach $210 million; “earnings growth expected as orders expand”

[Financial News] Kyobo Securities maintained its “Buy” rating on Sphere on the 11th, saying the company was entering a phase in which increased orders would be reflected in its earnings.
Kwon Oh-hwi, a senior researcher at Kyobo Securities, said in a report that day that “political uncertainty has increased since the U.S. midterm elections, but the structural growth trajectory of the space industry remains intact.”
It cited increased orders resulting from the shift to mass production of Starship and vertical integration of the supply chain as Sphere’s key growth drivers. As of the end of October, Sphere’s cumulative order value was estimated at about $210 million (280 billion won). This was higher than customers’ initial demand forecasts and was also up 190% from a year earlier.
“As Starship shifts to mass production, supply volumes and market share are both rising,” Kwon said. “We are watching for business expansion as a result of building a local supply chain.”
Third- and fourth-quarter revenue was forecast to rise 239% year over year to 71.6 billion won, while operating profit was expected to reach 3.3 billion won, marking a return to profitability.
Growth in the revenue base through the nickel business was also cited as a positive factor. The ENC nickel smelter in Indonesia, in which Sphere has invested for a 10% stake, obtained a commercial sales permit (IUI) on October 29. Revenue recognition is set to begin this month, and the company has secured a new revenue base of about 180 billion won through annual nickel offtake rights for 7,200 tons. Total revenue this year is forecast to rise 194% from a year earlier to 280.8 billion won.
The prolonged bottleneck in specialty-alloy supplies was also seen as an opportunity for Sphere. “The U.S. aerospace manufacturing production index has recovered to pre-COVID-19 levels, while lead times for nickel alloys are stretching to at least 40 weeks,” Kwon said. “With a network of at least 20 global manufacturing vendors, Sphere is working to shorten delivery times and meet customers’ quality requirements.”
Its collaboration with customers on product development and validation from the earliest stages of materials development was also viewed as a competitive strength. Given the high technological barriers and stringent certification procedures, existing suppliers are not easily replaced, the analysis said.
Kwon forecast that “integrating the supply chain—from sourcing high-purity Class 1 nickel through Indonesia’s ENC to mill-vendor manufacturing and final delivery—will improve the stability and competitiveness of raw-material procurement.”
[email protected] Choi Doo-seon Reporter