[Click e Stocks] "Cheonbo, Additive Business Growth Expected... Target Price Up"

[Asia Economy Reporter Song Hwajeong] On the 19th, Korea Investment & Securities raised the target price of Cheonbo from 380,000 KRW to 460,000 KRW, anticipating that the 2023 sales of electrolyte additives will reach 100 billion KRW and that these will emerge as a core material. The investment opinion was maintained as 'Buy.'

Jungwhan Kim, a researcher at Korea Investment & Securities, explained, "To reflect the growth potential of the additive business, which will generate sales starting in 2023, the earnings per share (EPS) used to calculate the target price was changed from 2022 to the average of 2022?2023," adding, "The estimated sales of electrolyte additives in 2023 are 104 billion KRW, accounting for 17% of the company's total sales, making it a core material."

On the 17th, Cheonbo announced plans to build manufacturing plants for secondary battery electrolyte additives, Fluoroethylene Carbonate (FEC) and Vanillin Carbonate (VC). FEC and VC are electrolyte additives effective in reducing interfacial resistance, improving ion conductivity, suppressing degradation, and enhancing safety in secondary batteries. Cheonbo secured a 34,200㎡ site within the Saemangeum Industrial Complex and plans to invest 200 billion KRW in stages. The company aims to build manufacturing plants with an annual capacity of 10,000 tons of FEC and VC by 2025 and start sales in the first half of 2023 when the first phase of the plant is completed. Researcher Kim said, "VC and FEC are representative additives that account for more than half of the electrolyte additive usage in China, and only a few companies mass-produce them. Currently, lithium salts, solvents, and additives, which are all components of electrolytes, are in short supply, so Cheonbo decided to invest in mass production of additives that it had only sold in small quantities."

Both the global electrolyte value chain and battery companies expect a prolonged supply shortage due to surging demand, leading to simultaneous expansion and supply contracts. Researcher Kim analyzed, "Cheonbo's additive expansion was decided because its products have advantages in quality, mass production, and price, so long-term supply contracts for additives are expected. Cheonbo is the only company in Korea capable of supplying additives in large quantities. VC is known to be used about twice as much in lithium iron phosphate (LFP) batteries compared to ternary (NCM, etc.) batteries, indicating strong demand from China. FEC is a fluorine-containing product, and only a few domestic companies producing fluorine-based materials can mass-produce it."