[Click eStock] "Cheonbo, Expected Earnings Growth Exceeding Battery Market Growth Rate"

[Asia Economy Reporter Oh Ju-yeon] Hana Financial Investment expects Cheonbo, a company specializing in secondary battery lithium salt electrolytes and additives, to achieve performance growth exceeding the battery market growth rate this year due to the global expansion of electric vehicle sales and increased battery demand.

According to Hana Financial Investment on the 15th, Cheonbo's sales this year are expected to reach 252.9 billion KRW, a 66% increase compared to the previous year, and operating profit is expected to increase by 68% to 47.4 billion KRW. The increase in demand for its main products, lithium salts and electrolyte additives, combined with the effect of its own market share growth, explains why this year's sales growth rate may exceed the overall market growth rate.

The proportion of Cheonbo's secondary battery material sales is estimated to have increased from 39% in 2019 to 45% in 2020, 65% in 2021, and 76% in 2022. Hana Financial Investment forecasts that global electric vehicle sales will reach 9.2 million units and battery demand will reach 656 GWh by 2025. This implies that battery shipments could expand 5.6 times over the next five years. Under these assumptions, battery demand is expected to increase approximately 2.5 times by 2023, while Cheonbo's secondary battery material production capacity is expected to increase about fourfold from 1,840 tons in 2020 to 4,000 tons in 2021, 8,000 tons in 2022, and 12,000 tons in 2023.

Sales for the fourth quarter of 2020, ahead of the earnings announcement, are also expected to show growth in line with market expectations, with a 25% increase in sales and a 10% increase in operating profit compared to the same period last year.

Hana Financial Investment has maintained a 'Buy' rating on Cheonbo and raised the target price from 210,000 KRW to 250,000 KRW.