[Click eStock] "Sungil Hightech, Poor Performance... Target Price Down from 130,000 to 79,000"

Yujiin Investment & Securities has significantly lowered the target price of Sungil Hi-Tech, a leading domestic company in the recycled battery sector, from 130,000 KRW to 79,000 KRW. This adjustment comes amid analysis that the pace of performance improvement is slow due to a large-scale operating loss recorded in the second quarter. However, performance is expected to improve in the second half of the year with the resumption of operations at the Hungarian subsidiary and the third factory.

Sungil Hi-Tech reported disappointing results in the second quarter of this year, with sales of 36.4 billion KRW and an operating loss of 19 billion KRW. Sales decreased by 43% compared to the same period last year, and operating profit turned into a large-scale loss. Analyst Park Jong-sun of Yujiin Investment & Securities commented, "The operating loss was larger than expected," and analyzed that "the cost increased due to intensified competition in purchasing raw materials (used batteries) and increased sales losses due to the use of raw materials purchased at high prices in the past."

Analyst Park further explained, "Nickel sales slightly increased and prices (selling prices) rose, contributing to sales growth, but the decline in cobalt prices acted as a factor reducing sales," adding, "Subsidiary sales also decreased due to reduced product sales and price declines, negatively impacting consolidated performance."

He forecasted, "Sungil Hi-Tech will resume recycling operations at its Hungarian plant and the third hydro center factory in Gunsan in the third quarter," and predicted, "As the year progresses, the operating rate of existing production facilities will increase, leading to higher methyl production."

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