[Featured Stock] Taekyung BK Highlights 2nd Battery 'De-Chinaization' and Coke Monopoly... Growth Explosion with PER Only 5 Times

[Asia Economy Reporter Hyungsoo Park] Taekyung BK's stock price is soaring. Securities firms' analysis that the company can supply coke, a key material used in anode materials for secondary batteries, appears to be influencing the stock price.

As of 9:27 a.m. on the 19th, Taekyung BK is trading at 6,050 KRW, up 13.72% from the previous trading day.

Hana Securities forecasted explosive growth in Taekyung BK's performance but did not provide a target price or investment opinion.

Researcher Choi Jae-ho of Hana Securities explained, "Profitability improvement is expected due to increased product supply through high market share of limestone and coke, rising product prices of coke as a substitute caused by soaring raw material and coal prices, and a pricing structure that allows price pass-through."

Taekyung BK is projected to record sales of 393.3 billion KRW and operating profit of 36.4 billion KRW this year, representing increases of 101.5% and 85.5% respectively compared to the previous year.

Established in 1980, Taekyung BK operates in limestone mining and processing for lime manufacturing, carbon dioxide business, and processes and sells petroleum cokes. The company monopolizes the coke market through an exclusive domestic supply contract with Oxbow, the world's number one company in the petroleum coke sector.

Researcher Choi stated, "As the global energy supply shortage continues, coal demand is rapidly increasing. Demand for coke, a substitute, is also exploding, allowing Taekyung BK to be the biggest beneficiary." He added, "If supply expands to coke used as a core material for secondary battery anode materials, the company's performance could experience a very rapid quantum jump."

Choi emphasized, "Considering that Taekyung BK's average price-to-earnings ratio (PER) in the past was 20 times despite explosive performance growth, the expected PER for 2022 is about 5 times, indicating significant undervaluation. This is why attention should be paid to Taekyung BK, which is expected to record its best-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 sharp rise from 4.1% → 10.0% → 9.8% → 15.7% → 42.1%.

It is important to note that coke is an essential core material for synthetic graphite anode materials in secondary batteries. Due to a lack of domestic technology, synthetic graphite has been entirely imported from countries like Japan and China. Recently, POSCO Chemical succeeded for the first time domestically in developing technology for the localization of synthetic graphite anode materials. Coke can be divided into coal-based and petroleum-based types, and currently, most coke used in secondary battery anode materials is understood to be coal-based. However, in line with the government's carbon neutrality policy, it is highly likely that the raw materials for producing needle coke, which reduces greenhouse gas emissions, will be expanded to petroleum coke.

Researcher Choi emphasized, "With preparations for the de-Chinaization of secondary battery materials, the possibility of petroleum coke being used as a secondary battery material is increasing. If the market expands to petroleum coke in the future, Taekyung BK, which supplies domestic petroleum coke under a monopoly system, could benefit."