[Click eStock] Cosmo신소재, Expansion Means Growth Soon

[Asia Economy Reporter Lee Seon-ae] Kiwoom Securities stated on the 15th that attention should be paid to the growth potential of Cosmo Advanced Materials.

Kim Ji-san, a researcher at Kiwoom Securities, said, "The main businesses, secondary battery cathode materials and MLCC release films, are both performing well, and the effect of production capacity expansion is beginning to take hold, so the earnings outlook is positive," adding, "In particular, a full-scale leap is expected to begin from the fourth quarter when the new release film line starts early operation."

This year's performance is forecasted at KRW 371.2 billion in sales (YoY 82%) and KRW 26.8 billion in operating profit (YoY 116%), while next year's performance is expected to be KRW 591.2 billion in sales (YoY 59%) and KRW 44.6 billion in operating profit (YoY 66%), maintaining previous estimates.

Cosmo Advanced Materials aims to narrow the gap as a latecomer in the NCM series through product advancement and active capacity expansion in cathode active materials. Currently, it mainly supplies the NCM 5 series and 6 series, and plans to attempt supplying the NCM 8 series as early as the first half of next year.

The next step targets the NCM 9 series and single-crystal products. If commercialization succeeds, it is expected to expand its position in major customers' electric vehicle batteries and achieve diversification of domestic and overseas customers.

Regarding cathode active material production capacity, it has completed expansion from 10,000 tons per year to 20,000 tons in the second half of this year and plans to expand supply after customer approval processes. It is expected to have a production capacity of 30,000 tons next year and 50,000 tons in 2023.

MLCC release films plan to expand sales of high-end automotive electronics. With the full-scale operation of the main customer's Tianjin factory in China, additional growth opportunities have been gained. The new release film line is scheduled to start operation from the fourth quarter, increasing production capacity by 22% to 55 million square meters per month, establishing an annual sales base of KRW 150 billion. Next year, it plans to increase to 70 million square meters.

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