[Click eStock] "EcoPro BM, Overcoming Concerns with a Surprise 2Q Earnings Outlook"

No Material Supply Delays as Feared... Steady Demand Growth Expected
"Overseas Production Facility Investment Is a New Growth Momentum"

[Asia Economy Reporter Minwoo Lee] Ecopro BM is expected to achieve strong performance in the second quarter despite concerns over market contraction due to the shortage of automotive semiconductors and container ship shortages. There were no delays in material supply, and it is analyzed that additional performance growth is possible in the second half of the year due to increased demand for electric vehicles.

On the 16th, Yuanta Securities forecast that Ecopro BM will record sales of 309.8 billion KRW and an operating profit of 23.1 billion KRW in the second quarter of this year. This represents increases of 63.1% and 66.2% respectively compared to the same period last year, and increases of 17.7% and 29.5% respectively compared to the previous quarter. The market consensus is also expected to be exceeded by 5.0% in sales and 11.2% in operating profit. Despite adverse factors such as market contraction due to the shortage of automotive semiconductors and container ship shortages caused by a surge in cargo volume, solid performance is expected.

Researcher Kwangjin Kim of Yuanta Securities said, "There are no delays in material supply, and profitability will improve as the operating rate of the CAM5 plant rises," adding, "In the second half, performance will grow based on the improvement in automotive semiconductor supply and demand, increased demand for electric vehicles due to increased mobility demand, and the start of new material supply to key customers."

As demand increases, the need to establish overseas production bases is also growing. With increased material supply due to expansions in Europe and the United States by key customers, the current method of supply via container ships is disadvantageous in terms of both time and cost. Researcher Kim said, "The amount of cathode material that can be transported per 40-foot container is only about 10 to 20 tons (equivalent to battery cell production of 6 to 12 MWh), so local investment is essential to respond to factories in Europe (Samsung SDI) and the United States (SK Innovation, Samsung SDI)," and predicted, "Investments will be concretized in the second half of the year, starting with Europe and then the United States."

He also anticipated that the stock price could be re-evaluated once overseas investments are decided, as the mid- to long-term capital expenditure (CAPEX) target will be revised upward. Researcher Kim explained, "Ecopro BM's existing plan to secure a production capacity of 180,000 tons by 2024 is limited to domestic investments," adding, "Overseas investments represent a completely new growth engine."

Against this backdrop, Yuanta Securities maintained its investment opinion of "Buy" for Ecopro BM and a target price of 250,000 KRW. The closing price on the previous day was 191,000 KRW.

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