[Click eStock] "EcoPro BM, Nickel Price Surge... Profitability Decline"

DB Financial Investment Report

[Asia Economy Reporter Minji Lee] DB Financial Investment maintained a buy rating and a target price of 550,000 KRW for Ecopro BM on the 6th.

Ecopro BM is expected to record 611.4 billion KRW in sales and 39.5 billion KRW in operating profit for the first quarter, representing increases of 21% and 43.9% respectively compared to the previous quarter. However, operating profit is estimated to slightly miss the market expectation of 42 billion KRW. The sharp rise in nickel prices in February, short-term cost burdens, the CAM4N fire, and costs related to the early operation of CAM6 are believed to have contributed to the decline in profitability. Sales are predicted to meet market expectations as the increase in CAM6 production, which ended in February, outweighs the production decrease caused by the CAM4N fire.

Jaeheon Jeong, a researcher at DB Financial Investment, predicted, “Although concerns about shipment slowdowns were high due to fires at some factories, adjusting the early operation of CAM6 and moving the mass production start of CAM5N from the first quarter of next year to the fourth quarter of this year means there should be no significant difficulty in achieving the annual shipment target.”

The operating profit estimate for this year is expected to be slightly lowered to 196.4 billion KRW. Researcher Jeong added, “However, regarding profitability, the short-term cost burden caused by the sharp rise in nickel prices in February and the gradual decline in metal prices expected after the second half of the year are factors to consider. Nevertheless, CAM4 has already received approval for startup, and if full operation begins in the second half, earnings estimates are likely to be revised upward.”

The planned paid-in capital increase from last year is expected to proceed within the first half of last year, after which plans for overseas expansion are expected to be concretized. Production capacity is anticipated to expand fivefold from 110,000 tons this year to 550,000 tons by 2026. Researcher Jeong stated, “This year’s growth is just the beginning, and mid- to long-term growth potential remains open.”

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