[Click eStock] "EcoPro BM, Sales Expected to Increase by 82% This Year"

Eugene Investment & Securities Report

[Asia Economy Reporter Minji Lee] Eugene Investment & Securities maintained a buy rating and a target price of 150,000 KRW for EcoPro BM on the 6th. This decision is based on the judgment that the current valuation held by the company is justified due to its high growth trend.

In the fourth quarter, EcoPro BM recorded sales of 1.9441 trillion KRW and an operating profit of 97 billion KRW. Sales surged 286% year-on-year, with Non-IT sales such as power tools increasing by 121%, and cathode material sales for electric vehicles soaring by 435%. This was due to a significant increase in NCM cathode material shipments to SK on and continued sales growth of GEN5 products for Samsung SDI. However, the operating profit margin plummeted to 5% due to a reduced spread margin caused by exchange rate declines and rising metal prices, as well as one-time expenses.

The company expects to record sales and operating profit of 9.764 trillion KRW and 561.7 billion KRW this year, representing increases of 82% and 47% respectively compared to the previous year. CAM5N (30,000 tons) is expected to operate at full capacity in the first quarter, and CAM7 (54,000 tons) will also begin main operations in the first half of the year. CAM4N, which was halted due to a fire, has completed repairs and is scheduled to start trial production in the first quarter.

Electric vehicle sales by BMW and Ford are also expected to surge. Pure electric vehicle sales by BMW and Ford, which use the company’s high-nickel cathode materials, are predicted to increase by 85% and 144% respectively compared to the previous year. The BMW Group sold 216,000 pure electric vehicles last year and aims for 400,000 this year. Ford sold 103,000 pure electric vehicles last year, with an expected increase to 250,000 this year. Researcher Byunghwa Han of Eugene Investment & Securities commented, “Ford’s 2023 electric vehicle production target, including plug-in hybrids, is 600,000 units, but this figure is excessively aggressive.”

Researcher Han also explained, “Although POSCO Chemical recently signed a supply contract for NCS cathode materials with Samsung SDI, this volume will not affect the company’s contracts through 2027. Rather, there is a high possibility that supply contracts for cathode materials to GM and Stellantis will also be additionally confirmed for EcoPro BM.”