[Click eStock] "EcoPro BM, Clear Price Increase Trend Amid Rising Anode Material Demand"

[Asia Economy Reporter Kwon Jae-hee] Hi Investment & Securities maintained a 'Buy' rating and a target price of 650,000 KRW for EcoPro BM on the 31st.

In the second quarter, EcoPro BM is expected to report sales of 943 billion KRW and an operating profit of 67 billion KRW. A strong performance is anticipated due to increased demand for cathode materials from key customers and a clear effect of price increases.

Some concerns remain regarding uncertainties in macro and upstream industries, including ▲ potential production disruptions at some automakers due to supply issues of key parts caused by the Russia-Ukraine conflict, ▲ prolonged COVID-19 lockdown measures in China, and ▲ semiconductor supply shortages.

However, major automakers are prioritizing the production of Battery Electric Vehicles (BEVs) to capture the rapidly growing electric vehicle market, clearly driving increased demand for battery cells and materials.

Jung Won-seok, a researcher at Hi Investment & Securities, analyzed, "Since raw material prices rose significantly in the first quarter, we expect about a 20% increase in cathode material prices in the second quarter of this year. Additionally, improved profitability is expected due to the easing of fixed cost burdens from increased utilization of the new CAM6 line and the reactivation of the CAM4 line."

Recently, the abnormal surge in raw material prices is expected to stabilize downward, which will act as a positive factor for EcoPro BM. Nickel prices, which showed an abnormal surge in the first half of this year, are expected to gradually stabilize downward, and lithium prices are also anticipated to decline starting in 2023. This is due to rapid expansions in production lines by major companies and increased new lithium mining, which is expected to somewhat alleviate supply shortages.

Researcher Jung stated, "Domestic companies with high technological competitiveness in the ternary cathode material market may secure overseas battery cell companies in the US and Europe as customers. Although growth stocks have shown high price volatility due to recent US interest rate hikes, we recommend using any corrections as buying opportunities."

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