[Quantum Jump 2023]

 

 'Stabilization of 'EV Charging' S-Traffic Strengthens 'Software Capabilities'

Seeking new business for 'UAM Smart Station', strengthening human capabilities· M&A Seeking

 

Transportation solution specialist S-Traffic is strengthening its software (SW) capabilities. The electric vehicle charging business, which has been elaborated as a new business, is entering the stage of stabilization and is trying to secure new growth engines. In the midst of this, existing businesses such as roads and railways last year also won continuous orders, showing an improvement in performance.

 S-Traffic is engaged in transportation-related SI (System Integration) business. By incorporating advanced technologies such as electronic control and communication into various means of transportation and facilities, information and control solutions are provided as a service. Hardware such as various facilities and equipment required for various operating systems and software including information technology (IT) solutions must all have technical skills.

 

 S-Traffic is steadily inputting money into the application of cutting-edge technology. In particular, the cumulative R&D expenses in the third quarter of last year were 4.2 billion won (US$3.2M), which is close to 4.3 billion won((US$3.3M)last year. Its share as a percentage of sales was also 6.15%. Through this, it is promoting the introduction of cutting-edge technologies such as artificial intelligence (AI) deep learning and cloud, which have recently increased their utility in various fields.

 In this regard, the company plans to further expand its business area. The 'urban air mobility (UAM)' project, which is constantly being discussed for commercialization, is a typical example. S-Traffic has experience and know-how in designing, installing, and operating various control systems in the fields of road, railway, and electric vehicle charging. Based on this, the plan is to explore opportunities to participate in related businesses such as traffic control in line with the full-scale commercialization of UAM.

 

First of all, in the road traffic sector, the deep learning license plate number image recognition engine business will be strengthened. Earlier, since 2019, it has been applied to the highway toll collection lane system, including the Hi-Pass. In the future, it is planned to apply it to an integrated video management system with cloud services in mind. Develop automation such as 'unrecognized and misrecognized type classification', 'rerecognition processing', and 'AI number recognition engine' training.

In the railway sector, it is also participating in the 'Smart Station' project led by Seoul Transportation Corporation. Smart station refers to an integrated platform that quickly analyzes data collected through various facilities. It is an Internet of Things (IoT)-based history management system that can control subsystems such as intelligent CCTV, mechanical facilities, and fire information with an integrated monitor on a 3D map.

 

S-Traffic is currently building smart stations at three stations of the Daegu subway's 'Anlan-Hayang Extension'. In the future, it will participate in expanding to subway and railway stations nationwide and make a profit. It is also planned to be used to develop new passenger services in the future.

In order to expand the business area, it is necessary to secure sufficient technology. Specific plans are still being discussed. Basically, it is also looking to strengthen its human capacity and, if necessary, expand through mergers and acquisitions (M&A).

"We have been in the hardware and software business related to transportation infrastructure, but the need for AI and cloud service technology is increasing," said an official from Estraffic, adding, "We are drawing a blueprint in the direction of strengthening software capabilities, but we have not yet decided on specifics, but we are considering ways such as strengthening human capabilities through internal manpower development or talent acquisition and promoting M&A."

 

 

S-Traffic boosted profitability last year through continuous orders in its road and rail business. Last year, operating profit on a consolidated basis increased by 646.8% year-on-year to KRW 10 billion(US$ 7.7M). Net profit for the same period turned black at 30.9 billion won(US$ 23.8M). However, sales amounted to 132 billion won(US$102M), a decrease of 3.9% compared to the previous year.

In the railway sector, the company received orders for the Seoul metropolitan area high-speed rail connection project worth 14 billion won, the Incheon Line 1 Geomdan Extension Line signal system project worth 19.5 billion won(US$ 15M), and overseas markets also received orders for projects worth 26.6 billion won(US$ 21M).

In the electric vehicle charging business promoted as a new business, the company has achieved desired results, contributing to the increase in profit margin. Last year, the company physically divided its electric vehicle charging business and established a new corporation, 'Ss Charger', and transferred 50.1% of the shares and management rights to SK networks. SK Networks invested KRW 72.8 billion(US$ 56M)in stock acquisition and participation in capital increase. Estraffic has collected a lot of cash through the sale of shares, and continues to participate in business operations and generate profits.