Input 2021.01.24 06:00
Setrec Eye (099320)Sung-dong Park, Chairman of the Board of Directors, recently Hanwha Aerospace (012450)It was said about the background of the decision to change the largest shareholder.
Hanwha Aerospace, an intermediate holding company in the aviation and defense division of Hanwha Group, announced on the 13th that it has decided to take over a 30% stake in Setrec I in stages. Regardless of the acquisition of the stake, the current management of Setrec I will be able to continue its independent management.
Centered on Setrec Eye Korea Aerospace (047810)With (KAI) LIG Nex1 (079550)The space industry has recently emerged as the next-generation food in Korea, with KAIST and KAIST joining hands for the development and commercialization of small satellites. This is to preoccupy the space Internet, that is, the low-orbit satellite communication market, which is the core of the space industry trend, which is being transferred from the government to the private sector. It is also a field where Setrec Eye is the focus. Next is a question and answer with Chairman Park Seong-dong.
-It’s the only private company in Korea that can make its own satellite system, how was it possible?
“Setrec-I was founded in late 1999, but the experience in developing satellite systems began more than 10 years ago when I was at the KAIST Satellite Research Center. Prior to the establishment of the company, I had three successful satellite development experiences. I think it was possible because we were aware of some information about potential customers and competitors through participation in the exhibition.”
-Aren’t the barriers to entry in the satellite development field high?
“That’s right. One of the typical fields with high entry barriers is the space field, including satellites and launch vehicles. After being launched into space, repairs are practically impossible, so high reliability is required. For this reason, many satellite buyers see many satellites from the perspective of satellite buyers. It is inevitable to prefer manufacturers with development experience and track record, and this is a high barrier to entry into the market.”
“As a way to overcome the practical limitations experienced as a startup and small and medium-sized business, we have attracted investment from large corporations. In addition, the heavy-duty and epic space business that we are currently doing, such as satellites, was somewhat overwhelming for SMEs.
Then, I wondered which one of the top 10 domestic companies could continue to do what Setrec I had been doing well. Among them, considering the corporate image, long-term strategy, and the social reputation of the next executive and successor to lead, we decided that Hanwha was the most suitable for us.”
-How is it expected to show synergy?
“We expect that more ventures will be made using the core technologies of Hanwha Group. In addition, Hanwha Group’s global network in the fields of defense, trade and construction is a great help in expanding the overseas business of Setrec I. I believe this will be.
In particular, since Hanwha Aerospace is also an intermediate holding company that has aviation and defense affiliates such as Hanwha Systems and Hanwha Defense, I think various collaborations will be possible.”
-We also heard news of SIIS and SIA, which are subsidiaries of Setrec Eye.
“Last year, we selected the host company for listing the two companies, but it seems too early to discuss when they will be listed.
The two subsidiaries are in charge of an important part of the value chain in the field of earth observation, just like Setrec I, but their main purpose is a business that is clearly separated from the core areas of Setrec I (artificial satellites, payloads, and ground stations).
Accordingly, the preparation for the initial establishment of the company was carried out by Setrec Eye, like the saying,’Put new liquor in a new unit’, and when it is judged that it is possible to survive, a separate CEO makes the company responsible for management. I took the way.
For a startup, listing is a way to objectively prove that the decision you chose was correct in addition to making money.”
“’Once customers go to the end’ is our strength and a differentiating factor compared to our competitors. Some say that Setrec I is targeting the satellite market at a low cost, but in reality it is receiving an appropriate price, and for that reason, It is making enough profits.
Potential customers in overseas markets can be divided into government agencies in developing countries that require technology transfer and companies in developed countries that purchase satellites for purely commercial purposes. For customers who want to transfer technology, it introduces the cases of Malaysia and the United Arab Emirates (UAE) in the past so that they can see the experiences of existing customers. Because it is difficult to find a marketer that is as good as the customer who is satisfied with us. For pure commercial satellite buyers, we help them make smart choices in terms of’Value for Money’.
Meanwhile, foreign institutions that purchase satellites from competitors are classified as potential purchasers of subsequent satellites and closely managed. Most of our competitors have been linked to customers and follow-up businesses, which is a point of exploitation.”
-The small satellite market is a trend these days. Did you expect it?
“From the standpoint of Korea, a latecomer of satellite development, it has been our long-standing argument that we should focus on small and medium-sized satellites rather than large-sized satellites, but it has not received much attention so far. New Space) trend was also recognized only two to three years ago in Korea, and it is true that SpaceX’s Elon Musk played a big role.
From the beginning of the company’s establishment until now, Setrec-I has focused on the small and medium-sized satellite field, which I think fits well with the current trend.
However, in the future, large satellites and small and medium-sized satellites will play a complementary role in the satellite market, and one will not completely replace the other. However, from the perspective of the industry, I think it is important to identify markets where competitiveness can be secured and focus on them to become first.”
-What do you think is the focus of’New Space’?
“The main keywords of New Space are likely to be’private-led’,’new business model’,’private capital’, etc. The most important thing here is’new business model that turns money’.
Except for the geostationary communication broadcasting satellite market, which has been led by private enterprises, space development in the past was government-centered and using government resources. In the future, there will be an era in which private companies create new businesses using venture capital-like venture capital.”
“Securing an independent launch vehicle will be a great help for the growth of the satellite industry. In particular, for companies that develop small and medium-sized satellites like us, relatively inexpensive solid propellant-based launch vehicles will be of great help in expanding the market.”
-What do you think is the latest aerospace trend?
“The latest trend in the space field is’Starlink’, which provides space Internet using small satellite groups that manufacture and operate multiple satellites at low cost.
In the artificial satellite field, various types of earth observation and communication services are being attempted while reducing initial investment costs by using micro-satellites and small-sized satellites, and more than 100 startups are developing small and medium-sized launch vehicles in the launch vehicle field. These are things you haven’t seen before.
-What is Cetrec Eye’s recent focus?
“I don’t think it’s different from last time just because it’s recent. I’m always keeping an eye on the space industry market, building a sense of new changes, and constantly taking new challenges for technological innovation.”
-What is the prospect of the aerospace industry and the direction to go?
“The current trend represented by Newspace is expected to remain in effect for the time being.
In order for Korea to effectively embrace this global trend and take it as an opportunity, I believe that private enterprises should play a more leading role, and the government should have a system that supports the needs of private enterprises.”