EcoPro BM Delivers Results Meeting Expectations... "Strong Performance Continues"

[Asia Economy Reporter Hyunseok Yoo] The securities industry has evaluated that Ecopro BM recorded strong performance in the first quarter. This comes with the expectation that this year's performance can also be anticipated due to favorable market conditions.

According to the financial investment industry on the 5th, Ecopro BM posted consolidated sales of 263.2 billion KRW and operating profit of 17.8 billion KRW in the first quarter. This represents increases of 57% and 102%, respectively, compared to the same period last year. On a separate basis, operating profit rose 114% to 18.9 billion KRW.

Overall operating rates increased due to the growing volume of NCA and SK Innovation-bound EV NCM cathode materials. The separate basis operating profit margin rose by 1.0 percentage point from the previous quarter to 7.2%. Alongside this, Non-IT cathode material sales reached 142.7 billion KRW; although this was a 10% decrease from the previous quarter due to the off-season effect, it was the second-largest quarterly sales figure in history.

Jungwhan Kim, a researcher at Korea Investment & Securities, explained, "EV sales increased by 22% from the previous quarter, the peak season, to 104.1 billion KRW, with SK Innovation-bound sales continuously rising." He added, "ESS sales recorded 15.2 billion KRW, which is presumed to be due to increased cathode material market share within customer companies and growth in overseas export volumes."

Jang Jung-hoon, a researcher at Samsung Securities, also stated, "Despite the first quarter being an off-season, the quarterly operating profit scale reached an all-time high." He explained, "By business division, the increase in battery shipments from customers in the first quarter and the growth rate of EV materials were most prominent, resulting in the EV materials sales proportion expanding from 28% in the first quarter of last year to 40%."

Due to favorable market conditions, performance is expected to improve this year as well. According to FnGuide, securities firms forecast Ecopro BM's sales and operating profit for this year to be 1.3349 trillion KRW and 97.9 billion KRW, respectively, representing increases of 56.18% and 78.70% compared to the previous year. Additionally, second-quarter sales and operating profit are expected to reach 296.5 billion KRW and 20.9 billion KRW, respectively, increasing by 56.12% and 50.60% year-on-year.

Researcher Jang said, "Sales are expected to increase quarter-on-quarter across all applications. Non-IT demand for secondary batteries is rising in areas such as E-bikes and wireless vacuum cleaners, while EV materials shipments to SK Innovation and ESS shipments to Samsung SDI are expected to increase quarter-on-quarter." He added, "Compared to competitors in cathode materials, Ecopro BM maintains higher profit margins, and further profit margin increases are expected in the second quarter due to higher operating rates."

Hyunsoo Kim, a researcher at Hana Financial Investment, emphasized, "In the non-IT, EV, and ESS sectors, the expansion of upstream demand and the increase in electric vehicle penetration rates are expected to expand the volume from major customers through a ripple effect." He stressed, "The proportion of cathode material sales for electric vehicle batteries and ESS relative to total company sales has risen from 27% in 2019, 40% in 2020, 61% in 2021, to 72% in 2022, and this growth trend in high-growth business sectors' sales proportions is expected to continue."