[Click eStock] "Top Preferred Anode Material Stocks LG Chem and Ecopro BM"

Meritz Securities on the 19th presented LG Chem and EcoPro BM as the top preferred stocks in cathode materials.

Last week, Albemarle presented a bottoming theory for lithium prices during its Q4 earnings briefing, announcing that subtle changes in supply variables have been detected. They anticipated the possibility of a price rebound from a long-term perspective amid potential upstream investment reductions and the final phase of midstream inventory depletion. Previously, price rebound factors for metals focused on supply changes (production cuts, restructuring, etc.), but attempts at production cuts led by top-tier companies are expected to be a positive signal for price changes in themselves. They analyzed that the catalyst for improving investment sentiment in the secondary battery sector currently is the proactive price rebound of lithium carbonate and Albemarle's optimistic outlook.

Last week, Kim Dong-myung, CEO of LG Energy Solution, disclosed plans to mass-produce 4680 batteries starting August 2024. The confirmed production schedule for LG Energy Solution's 4680 batteries is August 2024 at the Ochang plant in Korea (9GWh) and the second half of 2025 in Arizona, USA (36GWh). They plan to expand 4680 battery mass production scale through additional investments in the Nanjing plant in China. The challenges for mass production of 4680 batteries have been heat dissipation, separator welding, tabless design, and dry process. Currently, all challenges except the dry process are understood to have been resolved. The imminent mass production timing of LG Energy Solution's new form factor is expected to generate positive events for material companies.

No Woo-ho, a researcher at Meritz Securities, analyzed, "This month is a period of improving investment sentiment in the secondary battery sector, requiring a proactive increase in investment weight for companies with differentiated shipment volumes and high event visibility." From this perspective, LG Chem and EcoPro BM were selected as the top preferred stocks in cathode materials. Since the report published on the 5th, Meritz has been continuously upgrading its investment opinion on LG Chem. This is based on the normalization of captive internalized volumes, liquidity of shares held in subsidiary LG Energy Solution, and the potential for ROE improvement through the sale of non-core and inefficient business units. EcoPro BM is analyzed to be in a profitability recovery phase in the first half of 2024. It is expected to maintain its leading role through increased shipments to Samsung SDI, visibility of orders, and its transfer listing to KOSPI.

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