[Click eStock] "Dongwha Enterprise, The Secondary Battery Business Is Just Beginning"

[Asia Economy Reporter Hyunseok Yoo] KB Securities analyzed on the 27th that Dongwha Enterprise is expanding its business by acquiring a secondary battery materials company, and its contribution to future performance is expected to increase. No investment opinion or target price was provided.

Dongwha Enterprise, established in 1948, is the leading wood processing company in Korea. The Materials Division produces wood boards used for furniture and interior materials. The Building Materials Division's main products include reinforced flooring and design walls. In August last year, it acquired an 89.63% stake in Panasietec (now Dongwha Electrolite), which produces electrolytes, a secondary battery material.

KB Securities researcher Sang-guk Lim stated, "Starting this year, the electrolyte business for secondary batteries is expected to drive future performance, with sales growth anticipated due to securing new customers in the second half of the year. As of the first half of this year, electrolyte sales account for about 7% of total business, but with expansion completed by the end of 2021, electrolyte CAPA is expected to reach 53,000 tons. With the increase in electric vehicle demand, Dongwha Electrolite's contribution to performance is expected to gradually increase."

He added, "Despite sluggish conditions in the core market, the company is leading the market and value chain through mergers and acquisitions (M&A). Since entering Vietnam in 2012, it announced a 100% stake investment in Dongwha Vietnam in Hanoi in 2019. In 2017, it secured cost competitiveness and achieved vertical integration through various M&As and overseas market entries, including the acquisition of domestic solar synthesis and Finnish Tegofilm companies."

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