[Click eStock] "Cowintech, 3Q Sales Surge with Expanded Secondary Battery Investment... Undervalued"

[Asia Economy Reporter Hyungsoo Park] Eugene Investment & Securities forecasted on the 13th that Kowintech's sales will surge in the third quarter due to increased investment in the secondary battery front market. The firm maintained a 'Buy' rating and a target price of 34,000 KRW.

Kowintech recorded sales of 28.6 billion KRW and an operating profit of 700 million KRW in the second quarter. Compared to the same period last year, sales increased by 291.3% and operating profit rose by 349.3%.

Researcher Jongseon Park of Eugene Investment & Securities explained, "Sales were achieved at a level similar to estimates, but operating profit fell significantly," adding, "This was due to the reflection of temporary costs related to performance bonuses."

He continued, "The positive second-quarter results were driven by a 143.3% year-on-year increase in sales in the automation equipment sector as investment in the secondary battery front market expanded," and added, "Performance improved by reflecting sales related to system engineering of Top Material, acquired last March, and secondary battery materials."

Researcher Park also estimated, "Sales of 36.7 billion KRW and operating profit of 4.8 billion KRW are expected in the third quarter of this year," analyzing, "Sales will increase by 524.9% year-on-year, and operating profit will turn positive."

He expressed expectations, stating, "The increase in sales of secondary battery automation equipment will continue due to expanded investment in the secondary battery front market," and "Sales related to system engineering of Top Material, acquired last March, will also be fully reflected."

Furthermore, he emphasized, "The current stock price is at a price-earnings ratio (PER) of 20.2 times based on 2021 expected performance," and "It is undervalued compared to the average PER of 31.6 times for major domestic clients and similar companies."

Researcher Park predicted, "Despite a 13.8% stock price decline over the past six months amid the global expansion of secondary battery investment for electric vehicles and the resulting growth in equipment companies' performance," he noted, "The stock price decline is limited as sales of secondary battery system engineering by subsidiary Top Material are being fully reflected in addition to secondary battery automation equipment." He concluded that the stock price will shift to an upward trend along with improved performance.

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