[Click eStock] "EcoPro BM, 2024 Net Profit Forecasted at 300 Billion KRW... Target Price Up"

[Asia Economy Reporter Song Hwajeong] Hana Financial Investment raised the target price of EcoPro BM from 410,000 KRW to 550,000 KRW on the 4th, expecting long-term profit growth to continue and net profit to reach 300 billion KRW in 2024. The investment opinion was maintained as 'Buy.'

EcoPro BM recorded consolidated sales of 408.1 billion KRW and operating profit of 40.7 billion KRW in the third quarter of this year. These figures represent increases of 63% and 130%, respectively, compared to the same period last year. In the non-IT sector (accounting for 53% of sales), sales increased by 53%, driven by strong global demand for power tools and expanded demand channels for new applications such as e-mobility. In the electric vehicle battery sector (accounting for 42% of sales), sales rose 76% due to the ripple effect as Samsung SDI and SK Innovation's third-quarter electric vehicle battery shipments increased by 24% and 87%, respectively. The energy storage system (ESS) sector (accounting for 4% of sales) also maintained sales growth as overseas projects of client companies expanded. Kim Hyunsoo, a researcher at Hana Financial Investment, explained, "Operating profit margin remained high at 10% following the second quarter due to reduced fixed cost burden from increased utilization rates of new factories and lagging effects from rising metal prices."

Although a temporary growth stagnation is expected in the fourth quarter, long-term profit growth is projected to continue. Hana Financial Investment estimated EcoPro BM's fourth-quarter performance at 414.4 billion KRW in sales, a 68% increase, and 37.2 billion KRW in operating profit, a 158% increase. Researcher Kim said, "Due to production disruptions in electric vehicles caused by semiconductor supply shortages, client battery shipments have stagnated, making it difficult for EcoPro BM to achieve performance growth compared to the previous quarter. Profitability is expected to slightly decline compared to the third quarter as utilization rate growth stagnates amid rising fixed costs, but a high operating profit margin (9%) will still be maintained." He added, "Sales of batteries for major clients in Europe and the United States will continue to increase, and EcoPro BM's performance next year is expected to reach 2.4 trillion KRW in sales, a 70% increase, and 320.8 billion KRW in operating profit, a 52% increase."

Hana Financial Investment forecasts EcoPro BM's 2024 sales at 5.4 trillion KRW and controlling net profit at 300 billion KRW. Researcher Kim stated, "Cathode material production capacity will increase from 59,000 tons in 2021 to 170,000 tons in 2023 and 290,000 tons in 2025. The production capacity distribution, currently concentrated domestically, will expand to 40% in Asia, 30% in Europe, and 30% in the United States after 2025, enabling proactive localization to meet the demands of the U.S. and European electric vehicle markets and continuous performance growth."

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