[Click eStock] "Solus Advanced Materials, This Year's Profit Turnaround Depends on Battery Foil"

Target Price Revised Downward

On the 15th, IBK Investment & Securities analyzed that Solus Advanced Materials' possibility of turning a profit this year depends on sales in the battery copper foil segment. However, reflecting a downward revision of profit estimates, the target stock price was lowered to 11,000 KRW from the previous level. The investment opinion was maintained as 'Buy.'

Solus Advanced Materials' annual performance this year is expected to be sales of 663 billion KRW and an operating loss of 30 billion KRW. The company had previously set a sales target of 700 billion KRW in total, including 327 billion KRW from battery copper foil, 238 billion KRW from copper foil, and 135 billion KRW from electronic materials. Hyunwook Lee, a researcher at IBK Investment & Securities, explained, "Copper foil and electronic materials are expected to achieve guidance, but the recovery in the battery copper foil segment is the key variable for turning a profit."

Researcher Lee added, "Some lines of the second phase of the Hungary plant began operation in the fourth quarter of last year, expanding the battery copper foil production capacity (CAPA) to 20,000 tons this year. After the first quarter, inventory adjustments by major customers are expected to be completed, and shipments to new customers are also anticipated, making battery copper foil-centered growth the key for this year."

The first-quarter performance is estimated at consolidated sales of 149 billion KRW and an operating loss of 14 billion KRW. Sales are expected to decrease by 10.3% compared to the previous quarter, and the operating loss trend is expected to continue. Researcher Lee explained, "Although European electric vehicle demand in the first quarter increased by 30% compared to the same period last year, battery usage by major customers decreased, and electric vehicle sales by major customers in North America were sluggish. The battery copper foil segment's first-quarter sales are projected to decrease by 19.7% from the previous quarter to 64.4 billion KRW." The copper foil segment is expected to record sales of 54.6 billion KRW, showing a solid trend in demand for artificial intelligence (AI) applications.

Researcher Lee pointed out, "With the decrease in battery copper foil shipments and the fixed cost burden from the operation of some lines in the second phase of the Hungary plant, losses are expected to continue."

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