Performance Remains Strong for Secondary Battery Stocks... Target Prices Slightly Lower

[Asia Economy Reporter Park Soyeon] Ecopro BM proved its growth momentum with a Q2 earnings surprise this year.

According to the Financial Supervisory Service's electronic disclosure system on the 16th, Ecopro BM posted provisional Q2 sales of 1.1871 trillion KRW and operating profit of 102.9 billion KRW. These figures represent increases of 79.2% and 150.6%, respectively, compared to the previous quarter. They significantly exceeded market consensus of 941.1 billion KRW in sales and 68 billion KRW in operating profit.

The sharp rise in nickel and lithium prices in Q1 is estimated to have been reflected in selling prices from Q2 onward. In particular, the export price of cathode materials in Cheongju, where Ecopro BM is located, showed a steep increase from $36.3 per kg in Q1 to $57.6 per kg in Q2. Additionally, the resumption of operations at the CAM4 plant (annual capacity 14,000 tons), which had been halted due to a fire, and the Q2 reflection of the expansion completed in February at the CAM6 plant (annual capacity 36,000 tons) are analyzed to have driven the increase in shipment volume.

DB Financial Investment downgraded Ecopro BM's target stock price to 160,000 KRW while maintaining a buy rating. DB Financial Investment analyst Jeong Jaehun said, "Through Q2 earnings, it is judged that the profit-generating capability of new facilities and the ability to pass on raw material price increases to selling prices have been proven," adding, "We are revising upward the mid- to long-term profitability estimates to reflect this." However, he added, "Considering the valuation decline in the secondary battery materials sector, the premium is reduced from the previous 30% to 15%, resulting in a target price downgrade to 160,000 KRW."

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