[Click eStock] "EcoPro BM, Growth Expectations Valid Due to Customer Expansion... Target Price Up 29%"

Samsung Securities Report

[Asia Economy Reporter Minji Lee] Samsung Securities maintained a buy rating on EcoPro BM on the 4th, expecting that growth prospects driven by customer expansion will have a positive impact on investment sentiment, and raised the target price by 29% from the previous level to 220,000 KRW.

In the fourth quarter of last year, EcoPro BM recorded separate sales of 247.4 billion KRW and operating profit of 15.1 billion KRW, falling short of market expectations. Junghoon Jang, a researcher at Samsung Securities, said, "Although the decrease in sales converted due to the decline in the KRW-USD exchange rate in the fourth quarter was a factor, unexpected cost increases occurred due to shipment delays and increased sea freight costs caused by maritime transport issues."

With production capacity (CAPA) more than doubled compared to 2019, sales of 1.3686 trillion KRW and operating profit of 105.9 billion KRW are expected this year. This represents a downward revision of about 17% compared to previous forecasts. The downward revision reflects the decline in the KRW-USD exchange rate and the possibility of changes in some maritime logistics of customer companies.

However, sales scale is expected to expand further in the future due to production facility expansion. With aggressive expansion by SK Innovation and additional capacity expansion of EcoPro EM, a joint venture with Samsung SDI, the installed capacity is expected to increase by 50% compared to this year, reaching 90,000 tons by next year.

Researcher Junghoon Jang said, "Considering ramp-up, next year's sales scale will expand to the 2 trillion KRW range," adding, "Although earnings forecasts are revised downward, the expansion of customer demand and capacity increase next year will positively influence investment sentiment with growth expectations."

This content was produced with the assistance of AI translation services.