[THE INVESTOR] Driving down the road, when suddenly an ambulance screeches by with red sirens flashing and calling out to clear the way, another driver would naturally see that the special vehicle belongs to a nearby hospital, without thinking about where it comes from.
Actually, almost all of the ambulances on the road speeding by in Korea come from the KOSDAQ-listed tech company Autech.
Autech ambulance (Autech)
It not only makes ambulances with auto partners such as Hyundai Motor and Kia Motors, but also welfare and medical buses for on-location treatment and cargo vans, such as refrigerator vehicles for the logistics industry.
Autech, with a market cap of 74 billion won ($63.1 million), may look small from the outside, but its operations are big enough to say that nobody can dare challenge it and overrun its territory, given the high entry barriers with sophisticated technology requirements.
“Special vehicles cannot be mass produced, and one cannot produce and supply them by copying foreign or domestic technologies. Entry barriers are high, as the industry can only supply them to government agencies,” Autech said in its industry report.
To this end, Autech produces and supplies most of its 119 emergency ambulances to the Public Procurement Service and the Ministry of National Defense. Autech must meet their detail specifications and needs since the prime objective of operating the special vehicles is to save lives. Autech said it supplies up to 30 vehicles to an agency after winning a bid, unlike other commercial automobiles.
A lot more Autech vehicles are expected to be seen on the roads as the company prepares to provide its special vehicles for the 2018 Winter Paralympics in PyeongChang. Some 1,500 athletes will be participating in the global sporting gala.
“The reality is that there is a shortage of buses and cabs for the disabled. The government’s plan to invest in facilities for the disabled will likely boost earnings,” Autech said in its audit filing, noting that the company has a market share of about 90 percent in the country’s welfare vehicle sector.
Its consolidated operating profits reached 1.8 billion won on sales of about 125 billion won in the first quarter of this year, up from 1 billion won in operating profits and 99 billion won in sales a year ago, according to the company’s financial statements.
Autech was established in 2000 after taking over Kia Motors’ special vehicle business when the country’s second-biggest automaker went bankrupt in 1997. Autech also supplies cargo vans to Coupang, Korea’s largest mobile commerce, and KT&G, Korea’s biggest tobacco company.
By Park Hyong-ki (
hkp@heraldcorp.com)