[Click eStock] "Cheonbo, Equipped with Both Performance and Growth Drivers"

Mid-to-Long-Term Growth Drivers OK... "18-Fold Increase in Production Capacity Within 5 Years"

[Asia Economy Reporter Minwoo Lee] An analysis suggests that now is the right time to invest in Cheonbo. This is based on the judgment that not only are the earnings solid, but the growth drivers are also sufficient.

On the 3rd, Shinhan Financial Investment maintained its 'Buy' rating on Cheonbo and raised the target price by 11.1% to 300,000 KRW. The closing price the previous day was 222,600 KRW. Researcher Kangho Oh of Shinhan Financial Investment emphasized that the current moment is an ideal buying opportunity. This is because both demand and supply are increasing simultaneously, and the growth drivers are ample.

Shinhan Financial Investment forecasted that Cheonbo will record sales of 51.6 billion KRW and operating profit of 10 billion KRW in the second quarter of this year. These figures represent increases of 53% and 58%, respectively, compared to the same period last year. Growth is expected to continue in the third quarter as capacity expansion is reflected. Prices are also expected to rise as raw material costs increase. Additionally, volume is anticipated to grow due to increased demand from clients and the effects of capacity expansion. The company also views positively the potential for further client expansion and product diversification in the future.

Recent announcements of capacity expansion indicate a solid medium- to long-term growth driver. Last month, Cheonbo BLS, a 100% subsidiary of Cheonbo, announced new facility investments in the secondary battery electrolyte manufacturing sector. This was the first new investment announcement in about a year since July last year. As a result, production capacity is expected to increase from 1,560 tons in 2020 to 4,000 tons by the end of this year, 12,000 tons by the end of 2023, and 27,000 tons by 2026. This means production capacity will increase approximately 18-fold within the next five years. Since product quality competitiveness has already been proven, demand from existing clients is expected to increase, along with continuous expansion of new clients.

Researcher Oh stated, "For small and medium-sized secondary battery companies, stock prices tend to perform well during periods of high expectations for capacity expansion, strong earnings, and industry valuation rerating. Recently, as domestic and international secondary battery cell companies are expanding battery production and automobile companies are actively launching electric vehicles, interest in battery material companies is inevitably increasing." He added, "Now is the time when product technology competitiveness is highlighted, and since earnings growth is positive, it is an ideal time to buy."

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