[Click eStock] Ecopro BM Records Earnings Surprise but...

[Asia Economy Reporter Junho Hwang] DB Financial Investment lowered the target price of Ecopro BM to 160,000 KRW on the 15th, considering the overall stock price decline in the secondary battery materials sector, despite Ecopro BM recording an earnings surprise in the second quarter.

Ecopro BM's sales in the second quarter of this year reached 1.1871 trillion KRW, a 79.2% increase compared to the previous quarter, and operating profit was 102.9 billion KRW, a 150.6% increase from the previous quarter. These results significantly exceeded market expectations.

DB Financial Investment analyzed that the sharp rise in nickel and lithium prices in the first quarter was reflected in the second quarter's selling prices. They also noted that the export price of Ecopro BM's cathode materials showed a steep increase from 36.3 USD per kilogram in the first quarter to 57.6 USD in the second quarter. The resumption of operations at CAM4 (annual capacity of 14,000 tons), which had been halted due to a fire, and the full reflection of the second quarter output from CAM6 (annual capacity of 36,000 tons), whose expansion was completed last February, are estimated to have driven the increase in shipment volume.

Operating profit for the upcoming third quarter is estimated to be 94 billion KRW. Shipment volume in the third quarter is expected to increase due to the rising utilization rate of CAM4, which resumed operations in early April. However, profitability is anticipated to slightly decline due to a drop in ASP and the use of high-priced raw materials.

Jaeheon Jeong, a researcher at DB Financial Investment, stated, "Ecopro BM has demonstrated the profit-generating capability of the new CAM6 and the ability to pass on raw material price increases to selling prices through its second-quarter results." Reflecting this, we are revising upward our mid- to long-term profitability estimates, but considering the recent valuation decline in the secondary battery materials sector, we are reducing the premium from the previous 30% to 15%."

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