[Click eStock] SaevitChem, Operating Profit Up 71% This Year... On Track for Performance Growth by 2025

[Asia Economy Reporter Lee Seon-ae] Yuanta Securities forecasted on the 8th that Saevitchem's sales and operating profit this year will increase by 29% and 71% compared to the previous year, reaching 43 billion KRW and 9.5 billion KRW respectively. However, they did not provide an investment opinion or target stock price.

Researcher Lee Su-rim of Yuanta Securities stated, "This year, the sales of precursor composite solution are expected to be 19.2 billion KRW based on a 65% utilization rate of the 10,000-ton production capacity, and the total sales of the battery recycling division are expected to reach 31 billion KRW (a 35% increase). We anticipate sales from Korean precursor to begin in the second half of 2024, and the company will enter a full-scale performance growth trajectory in 2025."

Saevitchem was established in 1993 as Dongyang Chemistry, converted to a corporation in 2001, and changed its name to the current one in 2005. It was listed on the KOSDAQ market in August 2022. Based on its waste acid recycling business generated from semiconductor and display production processes, it officially entered the waste battery recycling business in 2017. Its business areas are divided into the precursor composite solution manufacturing, recycled cathode material manufacturing and sales battery recycling division, and the waste acid recycling division.

The production capacity of precursor composite solution is expected to increase from 10,000 tons this year to 30,000 tons in 2025 and 40,000 tons in 2026. With 30,000 tons fully reflected in 2025, the battery recycling division is expected to achieve sales exceeding 100 billion KRW. The third plant currently under expansion is scheduled to start operation from the second quarter of 2024, and all produced quantities will be supplied to LG Chem's cathode material line through Korean Precursor. Saevitchem signed a binding 10-year MOU starting in 2024 with Korean Precursor, a joint venture between LG Chem and Chemco, for the supply of precursor composite solution.

Since 2017, Saevitchem has been operating the waste battery recycling business, procuring raw materials from numerous domestic cathode material companies and others. Even when market competition intensifies in the future, stable raw material procurement from LG Chem will be possible. Currently, only the post-processing process is in operation, but from next year, additional pre-processing facilities will be added to operate the battery crushing process. Recently, with the development of a high-purity lithium carbonate extraction process, it has become possible to extract lithium carbonate additionally from black powder, and from next year, a 100-ton scale lithium carbonate extraction facility is scheduled to operate.