"Changsin New Materials, Price Increase Momentum Gains Full Steam... Market Share Strengthening Also Progressing Smoothly"

[Asia Economy Reporter Ji-hwan Park] Hana Financial Investment on the 25th forecasted that Changshin New Materials will have a year expected to show profit momentum due to price increases.

Seunghye Baek, a researcher at Hana Financial Investment, said, "The provisional results for the second quarter meet market expectations," emphasizing, "Recently, Changshin New Materials announced provisional first-half results that align with market expectations." The provisional net profit for the second quarter is expected to be 600 million yuan (106.7 billion KRW), an increase of 235% year-on-year and 42% quarter-on-quarter, according to the analysis.

The significant year-on-year increase in provisional net profit for the second quarter was driven by increased sales volume of the core product line, wet separators, based on the high growth of the electric vehicle market. Changshin New Materials' separator production volume is expected to be around 650 million m2, a 20-30% increase compared to the previous quarter, with estimates suggesting full production and full sales were maintained.

Researcher Baek anticipated simultaneous benefits from increased demand and price rises due to expectations of separator price hikes. Recently, Changshin New Materials' stock price has surged sharply since early May, reflecting expectations of separator price increases, continuing its strong performance by hitting a 52-week high. The global lithium-ion battery separator market is expected to have actual demand of approximately 7.3 billion/14 billion m2 and actual supply of about 8.9 billion/12.5 billion m2 for this year and next year, respectively.

Researcher Baek said, "As early as the fourth quarter of this year, we will face a separator shortage," adding, "separator prices, which had been declining until 2019, are expected to rebound." If separator price increases begin in earnest, it is expected that Changshin New Materials will simultaneously benefit from increased sales volume and price hikes, coupled with expanded production capacity.

He stated, "With continuous production capacity expansion, Changshin New Materials' global market share in 2025 is expected to expand from 27% in 2020 to 45-50%," adding, "market dominance is expected to gradually strengthen."

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