SEOJIN SYSTEM, which manufactures components for energy storage systems (ESS), communication equipment, electric vehicles, and semiconductors using aluminum, is attracting attention as its stock price halved despite entering the '1 trillion won club.'
Industry insiders interpret that the recent imposition of a 46% reciprocal tariff on Vietnamese products by the U.S. has dampened investment sentiment, given the company's major production base in Vietnam.
According to the 2024 business report, SEOJIN SYSTEM has large-scale production facilities and manufacturing equipment covering a total area of over 290,000 pyeong (approximately 964,000 square meters) in Vietnam.
On the 4th, SEOJIN SYSTEM's stock closed at 19,280 won. This represents a 46.8% drop compared to last May when it soared to 36,250 won during trading. This downward trend has continued since Donald Trump was elected president at the end of last year.
Vietnam has been a focal point for corporations from around the world as an alternative to China. Last year, Vietnam ranked 4th in the U.S. trade deficit standings, following China, the European Union (EU), and Mexico. President Trump criticized Vietnam as a 'vicious trade abuser,' forecasting high tariffs.
SEOJIN SYSTEM recorded its highest-ever performance with sales of 1.2138 trillion won last year, thanks to an increase in orders from ESS and semiconductor equipment clients. Operating profit also rose to 108.7 billion won, more than double the previous year's 49 billion won.
An official from SEOJIN SYSTEM noted, 'This tariff measure mainly targets Chinese products, with an additional 34% tariff applied to China's existing 20%, totaling 54%. In contrast, Vietnam's tariff is a lower 46%, so relative competitiveness remains valid.'
In the manufacturing of ESS components, which accounts for over half of total sales at 52.4%, the company has also announced plans to diversify risks through the operation of its Texas plant within the year.
Most of these components are destined for the U.S., and it is reported that there have been local production requests from major clients such as the global leader in ESS, Fluence, following the establishment of Trump's second term. It is expected that products will be produced in Vietnam and assembled in the U.S.
In the aerospace sector, which has emerged as a new growth area, it was also emphasized that the company acquired the U.S. precision machinery manufacturer RBR Machine at the end of last year and is conducting local production in parallel.
Vietnam serves as a major production base for domestic corporations such as Samsung and LG, and not only SEOJIN SYSTEM but also related partner companies are expected to fall under the influence of tariff increases. Among the companies operating locally, 88% are small to medium-sized enterprises. Currently, there are over 10,000 domestic small and medium-sized enterprises in Vietnam, estimated to account for over 20% of their annual exports to the U.S.
Among prominent listed companies, manufacturers of electronic components such as Jahwa Electronics, SEKONIX, and industrial bolt manufacturers like KPF, CS WIND (wind tower manufacturing), and DRB Industrial (conveyor belt manufacturing) are based in Vietnam.