[Click eStock] "Iljin Materials Begins Mass Production at Malaysia Factory"

[Image source=Korea Investment & Securities]

[Asia Economy Reporter Lee Jung-yoon] Korea Investment & Securities maintained a buy rating and a target price of 125,000 KRW for Iljin Materials on the 18th, stating that the increase in copper foil shipments is expected to become visible due to the easing of vehicle semiconductor chip shortages and electric vehicle production disruptions since the first half of this year.

Iljin Materials' sales in the first quarter of this year amounted to 200.1 billion KRW, a 45% increase compared to the previous year, and operating profit rose 58% to 21.6 billion KRW. Overseas subsidiaries recorded total sales of 78.1 billion KRW and net profit of 16.4 billion KRW, confirming that the Malaysia plants 1 and 2 (each with a capacity of 10,000 tons) are operating smoothly. Malaysia plants 3 and 4 (each with a capacity of 10,000 tons) are expected to undergo trial operations within the first half of the year and be reflected in sales from early the third quarter. Domestic headquarters also showed improvement with sales of 92.2 billion KRW and operating profit of 9.4 billion KRW.

Plans for local investment in Spain were also shared. The target for copper foil production capacity in the European region is ultimately 100,000 tons, with the first phase being 25,000 tons and an investment of 500 billion KRW planned by 2024. Spain is analyzed as the optimal environment considering costs such as electricity, labor, investment, and subsidies.

Researcher Kim Jung-hwan of Korea Investment & Securities explained, "With the start of mass production at Malaysia plants 3 and 4, a stepwise increase in sales and operating profit is expected by the end of the year," adding, "Due to continuous expansion of production capacity by more than 20,000 tons annually, operating profit is expected to increase by around 50% annually until 2024, strengthening the momentum for profit growth." He continued, "From 2024, expansions of factories in Spain and the United States (under review) will meet the rapidly increasing local demand."