[Click eStock] "Cowintech, From Secondary Battery Materials to Equipment... Expecting Soaring Performance"

[Asia Economy Reporter Jihwan Park] Yuanta Securities stated on the 25th that Kowintech is a company equipped with everything from secondary battery materials to equipment, and expects a significant increase in sales and operating profit this year.

Kowintech is a specialized company in automation equipment focused on secondary batteries. The sales proportion for secondary batteries accounts for 89% of total sales. Since acquiring Top Material, which operates in secondary battery materials and related businesses, in March last year, it is expected to expand its scale and profits through providing total solutions for secondary batteries.

This year, performance growth is anticipated due to increased orders from major domestic and overseas clients' investments. Sales are estimated to reach 183.5 billion KRW, up 90.6% from the previous year, and operating profit is expected to increase by 263.5% to 18.9 billion KRW.

Along with an increase in quarterly order backlog, overseas clients are also expanding. Kowintech's order backlog was 30.5 billion KRW at the end of 2020 and increased to 80.8 billion KRW by the end of the third quarter of 2021. Researcher Juwon Ahn of Yuanta Securities noted, "The increase in order backlog is due to aggressive investments by major domestic clients and the expansion of orders for overseas clients that began in earnest from 2021." In particular, since Top Material has a high proportion of overseas clients, it is expected that Kowintech's overseas secondary battery market share will expand rapidly by utilizing Top Material's overseas network. Top Material produces electrodes by processing raw materials such as cathode and anode materials and also develops LNMO, a next-generation cathode material, as well as possessing LFP design capabilities. Although the current scale of material sales is small, future sales expansion through mass production based on related technologies can be anticipated.

Researcher Juwon Ahn said, "Currently, Kowintech's stock price is at about 17 times the expected 2022 earnings," adding, "The company has a differentiated investment point by having a full lineup of secondary battery products from materials to equipment, and the future expansion potential of Top Material is also promising."