[Click e-Stock] "Lotte Energy Materials Set for High Growth on AI Circuit Foil and ESS... Target Price Raised"

DS Securities raised its target price for Lotte Energy Materials to 60,000 won, based on the company’s high growth potential driven by artificial intelligence (AI) circuit foil and energy storage system (ESS) battery foil, while maintaining its investment rating at "Buy."

Choi Taeyong, an analyst at DS Securities, said in a report on February 4, "In 2026, Lotte Energy Materials will be driven by improved high-profitability mix from AI circuit foil and ESS battery foil," forecasting this year’s revenue at 976.3 billion won (up 44% year-on-year), with an operating loss of 38.3 billion won continuing.

원본보기 아이콘

Lotte Energy Materials posted consolidated fourth-quarter results last year of 170.9 billion won in revenue and an operating loss of 33.8 billion won. The company’s top-line growth appears to have been driven by expanded sales of ESS and circuit foil amid a sharp rise in copper prices and a favorable exchange rate. However, due to production suspensions at customer sites following the abolition of North American subsidies, the utilization rate at the Malaysia plant came in at 43%, leading to only limited profitability improvement. Reflecting improved operations at the Iksan plant in line with circuit foil demand, the company-wide utilization rate was tallied at 45%.

Choi said, "We expect the company to turn profitable within this year, led by AI circuit foil and ESS battery foil, where demand for high-end copper foil is strong." He added, "The Iksan plant is expected to reach a capacity of 6,700 tons through conversion to circuit foil, and circuit foil revenue is projected at 140.9 billion won, up 160% year-on-year." In particular, he analyzed that supply of HVLP4 circuit foil will ramp up more in earnest in the second half of the year, in line with end-user companies’ new product launch schedules.

As for ESS revenue, he projected 321.8 billion won, up 150% year-on-year. Choi commented, "Weakness in EV battery foil shipments to North America due to the shutdown of the Ultium Cells plant is unavoidable," but added, "However, we expect this to be offset by new supply volumes to Chinese battery manufacturers for the Chinese and European markets, as well as to global OEMs in North America."

The sulfide-based solid electrolyte business for all-solid-state batteries and the 4680 battery business were cited as areas with future linkage potential to physical artificial intelligence (AI). Choi noted, "Lotte Energy Materials currently operates the world’s largest solid electrolyte pilot plant with an annual capacity of 70 tons, and shipments for 4680 batteries will begin in the second quarter of this year." He added, "For now, applications at customer sites are limited, so the business is largely reference-oriented, but given its potential scalability into physical AI alongside all-solid-state batteries, it is worth close attention."

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.