[Click eStock] EcoPro BM, Potential Increase in Fixed Cost Burden... Target Price Downgraded

[Asia Economy Reporter Hwang Yoon-joo] Shinhan Financial Investment maintained a 'Buy' rating on EcoPro BM on the 14th but lowered the target price to 500,000 KRW due to potential opportunity losses from a fire and increased fixed cost burdens from early product production.

Jung Yong-jin, a researcher at Shinhan Financial Investment, stated, "Considering the uncertainty of cost factors, we slightly lowered the profitability (OPM)."

Earlier, EcoPro BM's operations at Ochang CAM4 (10,000 tons) and CAM4N (4,000 tons) were suspended due to a fire that occurred in January. CAM4 is expected to resume operations in February to March after reflecting the safety investigation results.

However, the long-term growth outlook remains positive. Researcher Jung said, "To meet the surged demand from major customers, the early operation of CAM5N (starting in Q4) and CAM6 (full operation in Q1) is planned to compensate for the shortfall," adding, "Despite the estimated 80 billion KRW impact from the Ochang plant shutdown, Q1 sales are expected to be robust at 584.1 billion KRW (+121.7%)."

He continued, "The 2022 sales target is 3 trillion KRW (+101.7%), exceeding the existing consensus by +24%," and explained, "The 2026 capacity plan, reflecting long-term contractual relationships, has also increased by 15% from the previous 480,000 tons to 550,000 tons (North America 110,000 tons → 180,000 tons)."

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