[Click eStock] "WCP Continues Growth Through Customer Diversification... Target Price '↑'"

Yuanta Securities analyzed on the 1st that WCP is expected to announce customer diversification and long-term supply contracts in the second half of the year. The investment opinion was maintained as 'Buy,' and the target price was raised from the previous 100,000 KRW to 128,000 KRW.

WCP recorded sales of 76 billion KRW and operating profit of 16.7 billion KRW in the second quarter, representing increases of 21% and 13%, respectively, compared to the same period last year. Researcher Anna Lee said, "The demand for cylindrical separators in the second quarter was limited due to a decrease in downstream demand," but added, "Operating profit margin reached 22% thanks to steady demand for automotive separators from major customers."

Lee stated, "WCP is expected to see a decline in operating profit in the third quarter compared to the second quarter due to the acquisition of the coating line at the Ochang plant, product testing costs, and line modification costs caused by increased production," and added, "There are concerns about future profitability deterioration due to rising fixed costs as mass production begins at the Hungary plant from the second half of 2024."

However, she emphasized the importance of focusing on customer diversification and North American market entry announcements in the second half. She said, "Due to stable operating rates of major customers and significant top-line growth, an annual operating profit margin of over 20% is expected to be maintained," and stressed, "Starting with a five-year long-term supply contract with Samsung SDI for the North American market, customer diversification is expected to accelerate." She added, "Long-term supply contract announcements including Europe, Southeast Asia, China, and North America are expected to continue, and with the North American market entry announcement in the second half, related momentum is also significant."

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