[Click eStock] Taekyung BK, Explosive Growth in Supplying Core Materials for Secondary Battery Anode

[Asia Economy Reporter Lee Seon-ae] Hana Securities forecasted on the 19th that Taekyung BK's performance will increase explosively this year. Researcher Choi Jae-ho of Hana Securities emphasized the factors driving sales growth as "an increase in product supply volume (Q) through high market share of limestone and coke, a rise in product price (P) of coke as a substitute due to the sharp increase in raw material and coal prices, and profitability improvement due to a price decision structure (M) that allows price pass-through." Taekyung BK's expected performance for 2022 is projected to record sales of 393.3 billion KRW and operating profit of 36.4 billion KRW, representing increases of 101.5% and 85.5% respectively compared to the previous year. However, no target stock price or investment opinion was provided.

Taekyung BK was established in 1980 and operates in limestone mining and lime manufacturing through product processing, carbon dioxide business, and processing and sales of Petroleum Cokes. The company monopolizes the coke market through an exclusive supply contract with the world's No.1 petroleum coke company (U.S. Oxbow). As the global energy supply shortage continues, coal demand is rapidly increasing, and the demand for coke, a substitute, is also explosively rising, making Taekyung BK the biggest beneficiary. Moreover, if supply expands to coke used as a key material for secondary battery anode materials, the performance is highly likely to experience a very rapid quantum jump.

Researcher Choi said, "Despite this explosive performance growth, considering that Taekyung BK's historical average price-earnings ratio (PER) was 20 times, the expected PER for 2022 is about 5 times, indicating significant undervaluation," adding, "This is why attention should be paid to Taekyung BK, which is expected to record its highest-ever performance."

Recently, due to the surge in natural gas prices and worsening global energy bottlenecks, coal power generation has expanded, causing demand and prices for coal and coke to skyrocket. Examining the change in coke sales ratio from 2018 to the first half of this year shows a steep increase from 4.1% → 10.0% → 9.8% → 15.7% → 42.1%.

Additionally, attention should be paid to the fact that coke is an essential core material for synthetic graphite anode materials in secondary batteries. Synthetic graphite has been entirely imported from countries like Japan and China due to domestic technological deficiencies, but recently POSCO Chemical succeeded for the first time in Korea in developing domestic technology for synthetic graphite anode materials. Coke can be divided into coal-based and petroleum-based types, and it is understood that most coke used in secondary battery anode materials is coal-based. However, in line with the government's carbon neutrality policy, it is judged that the raw materials for producing needle coke to reduce greenhouse gas emissions will likely expand to petroleum coke. Researcher Choi emphasized, "With preparations for decoupling secondary battery materials from China, the potential for petroleum coke to be used as a secondary battery material is increasing," adding, "If the market expands to petroleum coke in the future, Taekyung BK, which supplies domestic petroleum coke under a monopoly system, will benefit."