[EcoPro Analysis] 'Self-Made' Owner Risk Challenge... 'Unprecedented' Stock Overheating

Former Chairman Dongchae Lee's Success Story Highlights
Born in 1959, Started Business After Banking Career
Ranked 5th Among Stock Billionaires After Over 30 Years

The reason EcoPro attracts public attention is not only due to its high business growth but also because of the success story of its founder, former Chairman Lee Dong-chae. The story of how he started a business with bare hands in a field unrelated to his major has become almost legendary.

Born in 1959 in Pohang, Gyeongsangbuk-do, former Chairman Lee graduated from Daegu Commercial High School and worked at a bank while attending Yeungnam University’s night school, majoring in Business Administration. At that time, the bank required employees to resign and rejoin to have their university degree recognized, so he left the bank and joined Samsung Electronics.

However, that life did not last long either. After joining, he obtained a Certified Public Accountant license and moved to an accounting firm, steadily saving business funds with a stable income. Once he secured the capital needed for startup, he left the corporation and entered the fur clothing business in 1996, but the company went bankrupt due to the 1997 Asian financial crisis.

[Image source=Yonhap News]

The following year, in 1998, after learning about the adoption of the Kyoto Protocol, which included greenhouse gas reduction agreements for developed countries, former Chairman Lee established EcoPro and launched into the battery and environmental materials business.

The opportunity for a comeback came in 2004. EcoPro began developing cathode materials as a national project with Cheil Industries. After three years of technology development, with no concrete results, Cheil Industries considered withdrawing from the business. At that point, former Chairman Lee purchased the technology, research data, and goodwill for 10 billion KRW. In 2007, EcoPro officially entered the cathode materials business and was listed on KOSDAQ.

The second turning point was in 2016 with the meeting of private equity fund (PEF) BNW Investment. Kim Jae-wook, former Samsung Electronics president and CEO of BNW Investment, played a major role in spinning off the loss-making secondary battery division to create EcoPro BM. BNW Investment, along with SK Securities PE and Industrial Bank of Korea PE, invested 60 billion KRW to acquire a 30% stake in EcoPro BM.

At that time, former Chairman Lee and EcoPro BM CEO Kwon Woo-seok regularly met with CEO Kim to receive management advice on manufacturing facilities and system construction. Based on this, EcoPro BM grew into the world’s second-largest cathode material company, and BNW Investment succeeded in recovering funds with a return rate exceeding 90% in 2019.

Currently, Chairman Lee holds an 18.84% stake in the holding company EcoPro, while relatives and other related parties hold 26.13%. However, he has stepped back from current management. In May, he was sentenced to prison in the second trial for unfair gains from insider trading and is currently detained.

EcoPro Group Organization Chart

Despite this situation, the overheated stock price shows no signs of cooling. EcoPro BM and EcoPro, ranked first and second on KOSDAQ, have surpassed market capitalizations of 27 trillion KRW and 26 trillion KRW respectively, exceeding KOSPI-listed companies such as Kakao, Hyundai Mobis, and Celltrion (23 trillion KRW). The combined market capitalization of the three EcoPro listed companies, including EcoPro HN, exceeds 54 trillion KRW, ranking fourth on KOSPI after Samsung Electronics, LG Energy Solution, and SK Hynix. As the stock price soared, former Chairman Lee ranked fifth among domestic stock wealth holders, following the Samsung family.

The securities industry has also given up on analysis amid the overheated atmosphere. Since Hana Securities suggested a fair price of 450,000 KRW for EcoPro in May and Samsung Securities proposed 400,000 KRW, no reports have been released. An anonymous securities industry official said, "Even if we bring all estimated future profits forward, the current corporate value is excessive," adding, "If you say this, you immediately face fierce protests from investors due to the blind enthusiasm."

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