[Featured Stock] EcoPro BM Surges 8% on Significant Earnings Estimate Upgrade

[Asia Economy Reporter Ji Yeon-jin] Ecopro BM is rising more than 8% on the 15th amid high expectations for significant earnings improvement this year.

As of 10:08 a.m. on the day, Ecopro BM is trading at 265,300 KRW, up 8.50% (27,000 KRW) from the previous day on the KOSPI market. During the session, it reached 269,700 KRW, setting a new 52-week high. This stock has recorded gains for five consecutive trading days since the 9th.

Earlier, Meritz Securities raised its operating profit estimates for Ecopro BM for this year and next, increasing the target price to 385,000 KRW. Researcher Joo Min-woo of Meritz Securities said, "Although the stock price has risen sharply recently, the pace of earnings improvement is progressing even faster, so the valuation burden is low," adding, "The current stock price is at a price-to-earnings ratio (PER) of 19 times based on 2023 EPS (earnings per share) and 13 times based on 2024, making it the most undervalued domestic cathode material company based on next year's figures."

Ecopro BM is expected to post an operating profit of 26.4 billion KRW in the second quarter, exceeding the forecast (21.6 billion KRW) by 22%, indicating strong performance. The margin for the third quarter is expected to reach 9.2%, the highest margin since Ecopro BM's listing, with operating profit projected at 36.1 billion KRW. This surpasses the forecast by 39%. The completion of the CAM5 cathode material integrated production system (gas, lithium, precursor, recycle) is reflected in these figures. This integrated production system will be applied to all newly expanded factories going forward. It is evaluated as a cost competitiveness incomparable to other cathode material companies.

This year's sales are expected to reach 2.46 trillion KRW, exceeding the forecast of 2.03 trillion KRW by 21%, and operating profit is expected to be 218.9 billion KRW, surpassing the forecast (151 billion KRW) by 38%. Next year's sales are expected to exceed 4 trillion KRW, and operating profit is projected at 358.5 billion KRW, exceeding the consensus (225 billion KRW) by 59%.

Researcher Joo explained, "The reason for the explosive earnings growth is the accelerated expansion speed of SK Innovation and Samsung SDI," adding, "Ecopro BM's cathode material production capacity was 60,000 tons at the end of 2021, 90,000 tons at the end of 2022, 150,000 tons at the end of 2023, and 230,000 tons at the end of 2024 (reflecting European investment). Except for the 2024 capacity, the estimates until 2023 remain the same as before. The shipment volume forecast from this capacity was revised upward (2023: 99,000 tons → 135,000 tons), and profitability forecast (8.2% → 8.9%) was also revised upward as a result."

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