[Click eStock] "EcoPro BM, Having the Best 3Q... Forecasting Record Quarterly Performance"

3Q Operating Profit 37 Billion Won... Surpassing 2019 Annual Operating Profit
"Sharp Rise May Cause Short-Term Stock Price Volatility"

[Asia Economy Reporter Minwoo Lee] Ecopro BM is expected to achieve its highest-ever quarterly operating profit this year, reaching 37 billion KRW in the third quarter.

On the 12th, Samsung Securities forecast that Ecopro BM will record consolidated sales of 389.9 billion KRW and an operating profit of 37 billion KRW in the third quarter of this year. This operating profit marks the highest quarterly performance in the company's history and is equivalent to the annual operating profit in 2019.

Jang Jeong-hoon, a researcher at Samsung Securities, explained, "In addition to the increased shipments of nickel-cobalt-aluminum (NCA) for small Non-IT products (such as power tools and electric vehicle motor-driven power supply products), the supply of Gen5 NCA811 cathode materials to Samsung SDI in Europe and the start of SK Innovation's supply of nickel-cobalt-manganese (NCM) half-half (90% nickel content) from the third quarter contributed to approximately 26% growth compared to the previous quarter."

The 10 trillion KRW order announced earlier last month also had a positive impact on the stock price. On the 9th of last month, Ecopro BM disclosed that it had signed a contract with SK Innovation to supply high-nickel NCM cathode materials worth 10 trillion KRW from 2024 to 2026. Based on current prices, this corresponds to approximately 300,000 tons of cathode material shipments. This means securing annual orders of 100,000 tons of NCM cathode materials starting in 2024. This appears to be related to SK Innovation's efforts to secure high-nickel materials for its expanded production facilities in the United States.

Researcher Jang said, "Ecopro BM mentioned in its previous earnings briefing that it plans to secure a production capacity of 290,000 tons by 2025. Considering that 110,000 tons are allocated to Europe and 90,000 tons to the joint venture Ecopro EM, the remaining production capacity can only meet SK Innovation's demand in the U.S."

Against this backdrop, Samsung Securities raised Ecopro BM's target stock price by 37% to 480,000 KRW. The closing price on the previous trading day was 423,200 KRW. The investment opinion was maintained as 'Buy.' However, short-term upside potential is expected to be limited.

Researcher Jang stated, "We raised the target price and maintained the 'Buy' rating by assigning growth potential and value to Korea's leading high-nickel cathode material company. However, considering that the recent stock price increase was largely influenced by the 10 trillion KRW order announcement, if we do not assume an order of the same scale at this point, short-term stock price movements may be sluggish."

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