[Click eStock] "EcoPro BM, Overwhelming 2Q Growth... Leading with Technological Competitiveness"

[Asia Economy Reporter Lee Jung-yoon] Eugene Investment & Securities maintained a buy rating and a target price of 150,000 KRW for EcoPro BM on the 18th, stating that after an overwhelming growth in the second quarter of this year, solid performance is expected in the second half as well.

EcoPro BM's second-quarter sales and operating profit were 1.1871 trillion KRW and 102.9 billion KRW respectively, significantly exceeding Eugene Investment & Securities' previous estimates of 897 billion KRW in sales and 65.7 billion KRW in operating profit. Sales surged 282% year-on-year, with Non-IT sales such as power tools increasing by 159% and cathode material sales for electric vehicles rising by 474%. Operating profit soared 254% year-on-year, and the operating margin increased from 6.2% in the previous quarter to 8.7%. CAM6 was fully operational, and the CAM4 line, which had been halted due to a fire, resumed operation, resulting in a substantial overall volume increase. Additionally, the sharp rise in raw material prices such as nickel and cobalt in the first quarter was reflected with a time lag in the second quarter, contributing to the price increase effect.

EcoPro BM's third-quarter sales and operating profit are expected to be 1.0775 trillion KRW and 91 billion KRW respectively, representing increases of 164% and 124% year-on-year. The production volume of electric vehicles equipped with EcoPro BM's materials, including Ford, BMW, Fiat, and Jeep, is expected to increase more significantly in the second half of the year. While the material prices, which lag by three months, are expected to decline and the exchange rate to rise, sales are anticipated to be slightly lower than in the second quarter. However, due to the business structure of receiving processing commissions, the operating margin is expected to remain at 8.4% in the third quarter. CAM5N is scheduled to start early operation in the fourth quarter, and CAM7's plant operation is expected to begin in 2023.

Furthermore, EcoPro BM's announced plan to secure a cathode material production capacity of 550,000 tons by 2026 is based on contracts with customers. Although sales may vary depending on raw material prices, profit levels can be reasonably estimated at this point. Recently, global companies such as Germany's chemical company BASF and Belgium's Umicore have announced expansions of cathode material facilities, but it is expected that there will be no impact on existing plans.

Researcher Han Byung-hwa of Eugene Investment & Securities explained, "The growth plan after the completion of expansion is important for future value evaluation, which will be determined by the development and commercialization speed of next-generation materials such as cobalt-free, manganese-rich cathode materials, and electrolytes for all-solid-state batteries," adding, "So far, EcoPro BM's technological competitiveness appears to be ahead of its competitors."

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