[Asia Economy Reporter Hyungsoo Park] Geumyang is showing strong performance. It appears that the analysis predicting significant sales from secondary batteries starting next year has influenced the stock price.
As of 10:42 AM on the 25th, Geumyang is trading at 6,200 KRW, up 12.32% from the previous trading day.
On this day, FS Research forecasted that Geumyang will enter a phase of structural growth as secondary battery sales are expected to be fully reflected starting next year.
According to FS Research, Geumyang is the third company in South Korea, following Samsung SDI and LG Energy Solution, to successfully develop the ‘2170 cylindrical secondary battery.’ The 2170 cylindrical secondary battery is used in electric vehicles, wireless power tools, kickboards, and electric scooters.
Researcher Lee Dan from FS Research stated, "Geumyang is currently expanding its secondary battery material production line," and analyzed, "They plan to operate facilities with a capacity of 100 million cells by 2024."
If a production facility with a capacity of 100 million cells is operated, annual sales are expected to exceed 600 billion KRW. The company is currently negotiating supply contracts with domestic power tool manufacturers and expects visible results starting in the second half of this year.
Geumyang is estimated to record sales of 261.2 billion KRW and an operating profit of 18.2 billion KRW this year. This represents a 20% increase in sales and a 50% increase in operating profit compared to last year.
The researcher explained, "Beyond the foaming agent business, the secondary battery and hydrogen fuel cell businesses utilizing platinum catalysts will be future growth engines," adding, "65% of sales in the first quarter of this year came from foaming agents and related products made from sodium as a raw material."
Furthermore, he analyzed, "The lithium hydroxide grinding and processing business and the zirconium additive business for improving cathode material performance are new growth drivers for Geumyang," and "They are currently attracting attention in the market."
Geumyang has established a 2170 pilot line on its headquarters site and plans to initially produce about 2 million cells by the end of this year to supply domestic power tool and personal mobility companies. Based on sales performance, the company has formulated a strategy to build a battery production line with a capacity of 100 million cells in Busan by 2024. The company expects to increase overseas sales to markets such as Milwaukee in the United States and Bosch in Germany. The company anticipates that Busan’s battery industry will establish itself as another source of foreign currency earnings.
Researcher Doohyun Kim from Hana Financial Investment analyzed, "Geumyang’s entry into the power tool market is becoming visible in a favorable environment," and added, "Geumyang’s 2170 battery has passed performance evaluation by SGS, an international standard certification body." He continued, "It delivers about 90% of rated capacity performance at low temperatures and has quality that is not inferior to competitors," and added, "They aim to ship 100 million cells by 2024."
Researcher Kim predicted, "After entering the power tool market, expansion into E-bikes and E-scooters is expected," and forecasted, "The integration into the secondary battery value chain is progressing in earnest."
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