[Click eStock] "POSCO Chemical, Strong Cathode Material Business... 3Q Earnings Meet Expectations"

[Asia Economy Reporter Lee Jung-yoon] Shinhan Investment Corp. maintained its buy rating and target price of 200,000 KRW for POSCO Chemical on the 18th, stating that the strong performance of the cathode material business is a foregone conclusion.

Jung Yong-jin, a researcher at Shinhan Investment Corp., explained, "With the effect of price increases reflected until July and August this year, the third-quarter cathode material performance is estimated to record sales of 432.5 billion KRW, a 151.8% increase compared to the same period last year," adding, "The anode material has also escaped a prolonged slump."

He continued, "As price increases were implemented in July, profitability is estimated to have recovered to a high single-digit level," and "With the completion of the artificial graphite plant, many customer orders related to anode materials are currently underway." He also noted, "Although there are no confirmed orders yet, the volume of anode materials is expected to remain flat through the second half of the year, but growth potential is being secured."

The biggest concern in the third quarter is the sluggishness in refractory and lime due to shutdowns in group companies. However, in the case of Lime Chemical, the impact lasted only about two weeks in September, and normal operations have resumed. For refractory, the impact is expected to continue until the fourth quarter, but the overall effect on performance is analyzed to be limited.

POSCO Chemical's third-quarter sales are expected to reach 792.4 billion KRW, a 56.9% increase from the same period last year, and operating profit is forecasted at 58 billion KRW, up 84.2%, meeting market expectations.

Researcher Jung viewed that the anode material business for secondary batteries has long been a product line for POSCO Chemical, but competitiveness has been questioned due to intensified competition from China. This is because product specification changes are minimal, and price competition mainly depends on raw material sourcing capabilities. After the completion of the artificial graphite plant earlier this year, productivity has been improved to a level competitive with Chinese products through the introduction of a continuous graphitization process.

Jung added, "Based on a comprehensive portfolio of artificial, natural, and low-expansion graphite, aggressive order acquisition in the anode material market is expected," and "If a large customer is secured through a long-term supply contract, it will act as a new trigger for a stock price level-up."

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