[Click eStock] "KPS, Growth in LFP Secondary Battery Recycling... Profit Turnaround Expected in Second Half"

The Korea IR Association analyzed on the 12th that KPS is expected to turn a profit this year due to investments by panel companies following the adoption of 8th generation OLED and the growth of LFP (lithium iron phosphate) secondary battery recycling.

KPS, established in 2000, is a manufacturer of OLED mask stretchers. In 2020, the largest shareholder and CEO changed, and the company expanded its business into the bio sector by acquiring BigThink as a subsidiary. In March of this year, it acquired Segiritec as a subsidiary, entering the recycling business. As of the end of Q1 this year, the sales composition is 23% OLED and 77% recycling.

Seongsun Park, a researcher at the Korea IR Association, stated, “With panel companies investing in 8th generation due to OLED adoption in IT devices, orders for the company’s stretchers are expected to follow orders for deposition equipment,” adding, “Considering the customer investment schedule, sales related to 8th generation are expected to begin partial recognition in 2024, and if deposition equipment orders are delayed, sales recognition will start from 2025.”

KPS acquired Segiritec, a waste battery recycling company, to mitigate volatility in the display equipment industry and for future growth. Operating in the designated waste recycling business requires multiple environmental permits, but since no new permits have been issued since 2011, it is a market with very high entry barriers.

Researcher Park said, “Currently, the main focus is on recycling lead-acid waste batteries, and recently the company has entered the industrial market where UPS is used,” adding, “Furthermore, the company is jointly discussing technology development and commercialization with government-funded national institutions to enter the LFP and NCM battery recycling markets, and it is expected to transfer LFP recycling technology and invest in pilot facilities within this year.”

Park analyzed, “KPS is expected to achieve sales of 128.6 billion KRW and operating profit of 11.8 billion KRW this year, representing increases of 779.8% and a turnaround to profit compared to the previous year, respectively. OLED sales reflect the deferred recognition of stretcher sales to DNP from last year, and inspection equipment and stretcher supply are expected to 6th generation FMM companies in Greater China and domestically.”

He continued, “In the recycling sector, with new UPS customers secured, related sales are expected to increase from the second half of the year, reflecting Segiritec’s performance, with annual sales expected to reach 100 billion KRW,” and forecasted, “Sales recognition of new production facilities (CAPA) related to lead batteries and secondary batteries will begin in 2024.”

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