[Click eStock] "Iljin Materials, Price Drop at Same Level... Target Price ↓"

[Asia Economy Reporter Hwang Yoon-joo] Samsung Securities announced that it is revising down the annual performance forecast for Iljin Materials due to the continuous decline in copper prices. The investment opinion remains 'Buy,' but the target price has been lowered to 100,000 KRW.

Jang Jeong-hoon, a researcher at Samsung Securities, projected, "The 2022 annual performance is revised down by 11%, from the previous 1 trillion KRW to 893.5 billion KRW."

Researcher Jeong explained, "We considered the ongoing downward trend in copper prices and the delayed full operation timing of Malaysia's 3rd and 4th plants compared to expectations."

He added, "As the average P/E (price-to-earnings) ratio of the peer group fell from 40.6 times to 37.1 times, the target price was lowered by 9% from the previous level."

Earlier, the second quarter recorded sales of 188.4 billion KRW and operating profit of 25.2 billion KRW, which were below market expectations. This was also influenced by the decline in copper prices.

Researcher Jeong analyzed, "Sales in the copper foil segment decreased by 4% compared to the previous quarter, reflecting the impact of copper price declines on some selling prices since April, as well as a decrease in sales volume due to global supply chain disruptions during the second quarter."

However, the operating margin reached 13.4%, the highest level since the third quarter of 2018. This is attributed not only to the effect of the Malaysia plant but also to active cost management.

Researcher Jeong stated, "We expect benefits from the expansion of cylindrical capacity and the increase in Gen 5 batteries by major client Samsung SDI," and judged, "The increase in copper foil volume for Ultium Cells and Chinese customers in Europe is a positive opportunity."