In today’s world where energy is becoming more of an issue in our everyday lives, alternative energy sources are being explored to reduce the carbon footprint and CO2 emission. This is aimed at reversing the effects of global warming which, according to scientists, has been caused by mankind’s actions on Earth.
As the world moves away from using coal as a power supply, more power plants that run on cleaner sources of energy are being constructed. Some may wonder how these industrial plants are constructed all across the globe and how all they will operate at the same standards worldwide. This is where companies that specialize in the construction of industrial plants come in.
Using the latest available technology to build world class electricity plants, these companies usually provide not only construction services but also installation and maintenance. It is even more important to build fully functional and efficient plants when there is limited land, and one such country is South Korea.
Guemhwa PSC: South Korea’s Premier Power Company
Guemhwa Plant Service and Construction Ltd. (KOSDAQ:036190) is a South Korea based company whose main line of business is the construction of industrial plants. Guemhwa builds many types of plants that run on different energy sources. These plants include thermoelectric power plants, nuclear power plants, petrochemical plants, liquefied natural gas (LNG) bases, tidal power plants, steel manufacturing plants and more.
Geumhwa also engages in the installation of the machinery used inside these plants. Some of their most recent installations include incinerators, sewage disposal plants, and apartment facilities for workers to live in.
But that’s not all. By providing maintenance services and upkeep services for all equipment used in the plants as well, Geumhwa is Korea’s leading one-stop shop for industrial plants. Not only is it one of the best performers in the local market, it is also actively involved with overseas business partners.
InvestAsian believes that Geumhwa is a strong buy because of its strong fundamentals and exceptional financial performance which have pulled the company through hard times.
Strong Fundamentals, Little Competition
Guemhwa has a great balance sheet as far as any analyst is concerned. With a current ratio of over 4, the company is in a secure place and is able to meet its short-term obligations with ease.
One of the main outstanding points is the fact that the company has no debt at all. It is a solely equity funded company. This implies that should the company ever feel the need for aggressive expansion, getting long term loans to finance their plans would not be a problem.
In addition, Guemhwa is one of just two companies in its industry that reported a net profit margin of above 10%, Geumhwa has a financial performance that outshines its competitors, as well as the best performance results in the industry.With an ROE of 17.0% and ROI of 16.5%, the company’s shareholders are being treated very well too
Currently selling only at 33,000 Korean Won per share, a shadow of its former self which once peaked at over 50,000 KRW, shares of Geumhwa should be of great value to investors – especially with a P/E ratio of just 9.42. With sound fundamentals and strong financial performance, the share price of Guemhwa should only go higher.