[Click eStock] "EcoPro BM, the Biggest Beneficiary of the US IRA Bill"

[Asia Economy Reporter Kwon Jae-hee] KB Securities maintained its 'Buy' rating and target price of 180,000 KRW for Ecopro BM.

Ecopro BM's third-quarter results recorded sales of 1.5632 trillion KRW and operating profit of 140.9 billion KRW, representing increases of 283% and 246% respectively compared to the same period last year. The operating profit exceeded the market consensus of 131.2 billion KRW.

Lee Chang-min, a researcher at KB Securities, analyzed, "Amid steady demand for cathode materials from two major customers, the average selling price (ASP) improved compared to the previous quarter due to the price reflection of key raw materials such as nickel and lithium, and the early operation of CAM5N increased cathode material shipments."

Accordingly, Ecopro BM's performance next year is also expected to remain strong. Sales in 2023 are estimated at 7.6428 trillion KRW and operating profit at 671.8 billion KRW, representing increases of 50% and 60% respectively compared to the previous year. With steady demand for high-nickel cathode materials and new production lines contributing significantly to performance, growth exceeding market expectations is anticipated. In particular, the specific details of the U.S. Inflation Reduction Act (IRA) are expected to be finalized within the year, raising expectations for related benefits. Since Chinese companies are virtually unable to enter the U.S. market locally, battery cell and automaker companies will likely continue to favor high-nickel cathode materials as their only option.

The researcher stated, "Ecopro BM is estimated to produce 180,000 tons out of its 550,000-ton capacity in the U.S. by 2026, which will be the highest production ratio among small and medium-sized companies in the U.S.," adding, "The benefits related to the IRA are expected to be clear."

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