[Click eStock] Solus Advanced Materials, Continued Losses Expected... Target Price ↓

[Asia Economy Reporter Hwang Yoon-joo] Kiwoom Securities maintained a 'Buy' rating on Solus Advanced Materials on the 28th, stating that losses are expected to continue in the first quarter of this year, but lowered the target price to 84,000 KRW.

Kim So-won, a researcher at Kiwoom Securities, stated, "Solus Advanced Materials' first-quarter results are expected to show sales of 115.8 billion KRW (+21% QoQ, +30% YoY) and an operating loss of 2.7 billion KRW (loss continuing QoQ, loss turning YoY). Although the deficit is expected to improve compared to the previous quarter, the loss trend is likely to continue."

Researcher Kim explained, "Fixed costs continued due to a temporary shutdown of the battery copper foil plant for stabilization work, and the rise in electricity prices caused by the energy crisis in Europe triggered by Russia has also affected profitability."

On the other hand, the performance of existing business units other than battery copper foil continues to show a solid trend.

Researcher Kim forecasted, "The proportion of high-end 5G products, which had recently been sluggish in copper foil, is gradually expanding, and the advanced materials division will offset the seasonal off-season impact with ① expanded supply of new materials for QD displays and ② steady OLED demand from China."

Researcher Kim stated, "Operating profit is expected to turn positive from the second quarter, and the new battery copper foil plant operation and performance improvement are expected from the second half of the year."

He added, "The second quarter is also expected to bring new order momentum for battery copper foil, providing another opportunity to secure mid- to long-term performance stability," and "The advanced materials division's second-half performance is also expected to increase significantly due to the combined effects of the OLED peak season and expanded supply of QD filler materials."

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