[Click e Stocks] "EcoPro BM, Expecting Lower First Half and Better Second Half Performance Next Year"

KB Securities expects Ecopro BM's performance next year to follow a pattern of weak start and strong finish, maintaining a 'Buy' investment rating and a target price of 350,000 KRW.

Lee Chang-min, a researcher at KB Securities, stated, "Ecopro BM's performance next year is estimated to show a 14% increase in sales to 8.37 trillion KRW and a 25% rise in operating profit to 359.1 billion KRW compared to the previous year. Although weak demand in the upstream market is expected to continue until the first half, from the second half, interest rate cuts, global economic recovery, and pent-up demand due to low inventory levels are anticipated, making a performance rebound possible."

Ecopro BM's fourth-quarter performance this year is expected to fall short of market consensus. The researcher explained, "The fourth-quarter sales are estimated to decrease by 17% year-on-year to 1.61 trillion KRW, and operating profit is expected to drop by 80% to 19.4 billion KRW, falling below consensus. The factors causing the third-quarter performance slump are expected to continue into the fourth quarter, with the average selling price (ASP) of cathode materials projected to decline by 10% quarter-on-quarter and sales volume to decrease by 3%." He added that NCA (Nickel-Cobalt-Aluminum) for Samsung SDI's electric vehicles is estimated to perform relatively well in shipments, but due to the continuous decline in lithium prices causing cathode material prices to fall, customers are expected to maintain slim inventory levels, which may lead to inventory adjustments. Demand for power tools is expected to remain weak for the time being due to ongoing supply-demand imbalances upstream. NCM (Nickel-Cobalt-Manganese) for SK ON is expected to continue experiencing weak demand as excess inventory in North American automotive OEMs has not been resolved. The researcher added, "The lagging effect caused by the decline in lithium prices (the time delay between raw material input and performance results) is expected to lead to profitability deterioration and inventory valuation losses."

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