[Click eStock] "EcoPro BM, Attractive Valuation and High Revenue Growth... Target Price Up"

[Asia Economy Reporter Kwon Jaehee] Yuanta Securities maintained a 'Buy' rating on EcoPro BM on the 17th and raised the target price from the previous 158,000 KRW to 210,000 KRW.

EcoPro BM's stock price has recently surged, raising market concerns about its valuation. However, considering an average annual growth rate of over 33% from 2022 to 2025, EcoPro BM still holds high valuation attractiveness. In particular, with the tightening of the U.S. Inflation Reduction Act (IRA) every year, finished car OEMs and cell companies prefer contracts with companies that have well-established de-China supply chains, leading to high expectations for orders within the U.S. When order contracts are announced, it is expected that EcoPro BM's valuation attractiveness will increase further due to additional production capacity expansion.

High external growth is also expected this year. EcoPro BM's sales this year are projected to reach 8.5 trillion KRW, and operating profit is expected to increase by 58% and 60% respectively compared to the previous year, reaching 611.3 billion KRW. Although there may be price declines due to continued weak demand in the electric power tool sector in 2023, exchange rates, and average selling price (ASP) decreases, external growth of over 58% is expected this year solely from the electric vehicle sector with the operation of 30,000 tons of CAM5N and 54,000 tons of CAM7 within the year.

Researcher Lee Anna of Yuanta Securities analyzed, "Despite the recent sharp rise in stock price, valuation attractiveness remains high, and considering external growth from production capacity expansion and order momentum in the U.S., investment attractiveness is high," adding, "After the U.S. IRA amendment in March, if North American investment plans are specified, order momentum is also expected."