SK Securities issued a research note on 22nd May arguing that TMC (KOSDAQ: 217590), a South Korean industrial cable manufacturer, stands to improve its profitability substantially as it rebalances its product mix away from marine cables and towards higher-margin speciality cables.
Analyst Na Min-sik initiated coverage with a "Not Rated" designation; the shares currently trade at 16,830 won.
TMC recorded revenues of 340.9bn won in 2025, a 9% decline year-on-year, with an operating profit margin (OPM) of just 1.9%. The revenue breakdown illustrates the challenge: marine shipping cables account for 75% of sales, with offshore cables at 8%, other speciality cables (including nuclear power plant applications) at 6%, and fibre-optic cables at 6%.
The margin profile tells a striking story. Fibre-optic cables generate an OPM of around 10%, nuclear plant cables 7–8%, LNG vessel cables 4%, and conventional merchant shipping cables a mere 2%. With three-quarters of revenue tied to the lowest-margin segment, even a modest shift towards speciality products would structurally lift group-wide margins.
Four engines of growth
The bull case rests on four catalysts.
First, fibre-optic cables. TMC's factory in Texas is scheduled to begin mass production in October 2025, positioning the company to satisfy the "Build America, Buy America" (BABA) procurement requirements that apply to federally funded projects. This should allow TMC to benefit directly from surging demand for AI data-centre connectivity and fibre-to-the-home (FTTH) roll-outs. The company already sits in a well-defined supply chain as a vendor to Corning and Amphenol, with orders flowing along an "Nvidia → Corning → TMC" value chain.
Second, nuclear power cables. TMC expects to obtain Class 1E safety certification — the internationally recognised standard for safety-critical nuclear electrical components — in January 2026. That accreditation would allow the company to double its revenue per project. Sales related to the Shin Hanul Units 3 and 4 nuclear plant construction (a major South Korean project) are forecast to ramp up meaningfully from 2027.
Third, underground residential distribution (URD) power cables. TMC is targeting UL certification in the second half of 2026, which would open the door to the American market for replacing ageing underground power infrastructure. The analyst notes this opportunity has been largely overlooked by investors, overshadowed by enthusiasm for the fibre-optic business.
Fourth, naval and military-specification cables. These could benefit from ties to Hanwha Ocean and HD Hyundai Heavy Industries, both of which are pursuing maintenance, repair and overhaul (MRO) contracts with the United States Navy.
2027: the year it all comes together
SK Securities places the inflection point for meaningful group-wide revenue growth in 2027. The intervening period — 2025 and 2026 — is characterised as a preparation phase, during which the Texas plant ramps up to full utilisation and regulatory certifications are obtained. Capital expenditure is also expected to accelerate from 2027.
The report concludes that the market currently views TMC primarily as a fibre-optic cable play, leaving the structural margin improvement story and the nuclear and URD cable opportunities unreflected in the share price.