[Click eStock] "EcoPro BM, the Versatile Anode Material Specialist, Shows Stable 1Q Performance"

1Q Sales Expected to Surpass 270 Billion KRW, Operating Profit 18 Billion KRW
First in Korea to Vertically Integrate Precursors, Lithium, Gas, Recycling
Easy Overseas Expansion... Confidence in Differentiation Up

[Asia Economy Reporter Minwoo Lee] EcoPro BM, a developer of core materials for secondary batteries, is expected to achieve solid results in the first quarter of this year. It is analyzed that the company will demonstrate differentiated competitiveness by vertically integrating all cathode material production elements such as precursors, lithium, and gases.

On the 2nd, Meritz Securities forecasted that EcoPro BM will record consolidated sales of 270.3 billion KRW and operating profit of 18.1 billion KRW in the first quarter of this year. These figures represent increases of 61.2% and 104.8%, respectively, compared to the same period last year. They generally align with market consensus estimates of 273.2 billion KRW in sales and 17.7 billion KRW in operating profit. Researcher Juminwoo from Meritz Securities stated, "Although inventory adjustments are expected for non-IT demand, the electric vehicle (EV) and energy storage system (ESS) segments will continue to show robust growth."

Meritz Securities particularly highly evaluated EcoPro BM's completion of vertical integration. EcoPro BM is the only company that has vertically integrated all cathode material production elements: precursor (EcoPro GEM), lithium (EcoPro Innovation), gas (EcoPro AP), and recycling (EcoPro CNG). The competitiveness of vertical integration is also well demonstrated by the gap in operating profit margins compared to competitors.

Researcher Joo explained, "EcoPro GEM supplies raw materials such as lithium, nickel, and cobalt recycled from spent cathode materials purchased from battery companies including LG Energy Solution at about 20% cheaper than market prices. Considering the fate of cathode material companies that must compete not only in technology but also in price, EcoPro BM's competitiveness is incomparable to competitors, and the final completion of vertical integration will be an important factor in securing new customers including LGES."

Vertical integration is also analyzed to be important for overseas expansion. EcoPro BM currently has a production system of 30,000 tons in Ochang and 60,000 tons in Pohang. New expansions are expected in the second half of this year with CAM7 (estimated 30,000 tons) in Europe and CAM5N (estimated 30,000 tons) in Pohang. This marks the first entry of a domestic cathode material company into Europe. Investment in the United States is also under consideration. The European Union (EU) is promoting the management of carbon footprint (the total amount of greenhouse gases directly and indirectly generated in the process of producing and consuming energy) and setting mandatory usage ratios for recycled materials to strengthen carbon dioxide emission requirements for battery production within the region.

Researcher Joo said, "This is why it is difficult for cathode material companies, which cause the most carbon dioxide emissions within batteries, to enter local markets," and added, "These strengthened requirements will further highlight the competitiveness of recycling vertical integration."

Against this backdrop, Meritz Securities maintained a 'Buy' rating on EcoPro BM and raised the target price by 12.5% to 225,000 KRW. The closing price on the previous day was 165,000 KRW.

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