[Special Stock] T플랙스, Nickel Supply Shortage Concerns Following Natural Gas... Industry Leader's Record-Breaking Performance

[Asia Economy Reporter Hyungsoo Park] T플랙스 is showing strong performance. The sharp conflict between Russia and Ukraine has caused raw material prices to surge, which appears to be impacting T플랙스's stock price. While GSE and Mirae Life Resources are gaining attention due to inflation concerns, T플랙스, which achieved record-high performance last year, is also drawing increased interest. GSE and Mirae Life Resources have risen approximately 105% and 85%, respectively, since the beginning of this year.

As of 11:26 AM on the 22nd, T플랙스 is trading at 4,660 KRW, up 3.33% from the previous day.

T플랙스 recorded its highest performance since its founding last year. It achieved sales of 189.5 billion KRW and operating profit of 16.8 billion KRW last year, representing increases of 42.9% and 251.7%, respectively, compared to the previous year. T플랙스's market capitalization is about 113.5 billion KRW. Its stock price has risen 5% since the beginning of this year. T플랙스 maintains the number one market share in the stainless steel bar sector, which consists of cylindrical stainless steel blocks, holding over 40% of the market.

Researcher Jongwon Lee of Sangsangin Securities explained, "Due to the rise in nickel prices and supply of battery module materials, performance growth is expected to continue this year," adding, "With increased semiconductor equipment investment and growth in the automobile and electric vehicle markets, demand for stainless steel is rising."

He continued, "More than 40% of bolts, nuts, and valves produced domestically using stainless steel bars are T플랙스 products," and added, "They also operate a rare metal business specializing in the distribution of special materials such as nickel, tungsten, and titanium."

He emphasized, "The sales profit margin compared to raw materials like titanium and nickel ranges from 15% to 25%, showing diversity," and stated, "They plan to continuously expand related volumes in this high value-added business division."

Lee said, "The main business stainless steel has high strength and features rust resistance by mixing nickel and chromium with iron," and analyzed, "Due to the rise in the price of nickel, a key material, sales price increases and profit margin improvements are expected."

Furthermore, he stressed, "Due to concerns over the Russia-Ukraine conflict and the rapid growth of the electric vehicle market, the upward trend in nickel prices is expected to continue in the mid to long term," adding, "The rise in nickel prices is very positive for T플랙스’s profit margin improvement through stainless steel sales price increases, demand growth incentives, and inventory sales." Sangsangin Securities maintained a target stock price of 6,500 KRW for T플랙스.

Raw material prices, with a high production proportion in Russia, continue to soar. Nickel prices, considered a key material for electric vehicle batteries, reached $24,870 per ton as of the 21st, marking an 11.4% surge compared to the previous month's average.

Market research firm SNE Research analyzed that global nickel demand for secondary batteries will increase to 841,000 tons by 2025 and 2.37 million tons by 2030. This is about twice and six times the estimated demand of 385,000 tons this year, respectively. Expectations are growing that from 2024, there will be a shortage of nickel for secondary batteries due to the shortage of high-purity nickel for secondary batteries and the rapid increase in demand for stainless steel, a major nickel consumer.