[Click eStock] "TCC Steel Expected to Benefit from Exclusive Supply of Secondary Battery Materials"

NH Investment & Securities Report

NH Investment & Securities evaluated on the 9th that TCC Steel is expected to see improved performance due to the expansion of investment in facilities related to secondary batteries.

TCC Steel is a specialized manufacturer of surface-treated steel sheets, producing tin-plated steel sheets, electrolytic chromium-treated steel sheets, nickel-plated steel sheets, and copper-plated steel sheets used in food and beverage and industrial packaging containers, as well as electronic products.

The company’s nickel-plated steel sheets for cylindrical secondary battery cases, which have rapidly emerged as a core material for secondary batteries, were first developed domestically by the company in 2001 and are exclusively supplied through partner processors of LG Energy Solution and Samsung SDI.

To respond to the rapidly increasing demand driven by the expansion of the electric vehicle market, the company is currently expanding new production lines. In December 2021, it announced an investment in a dedicated nickel-plated steel sheet line, and in November of last year, it expanded the scale of the facility investment. Sim Eui-seop, a researcher at NH Investment & Securities, stated, “It is expected to start trial operations in July, and upon completion, the nickel-plated steel sheet capacity will expand from the existing 70,000 tons to approximately 200,000 tons.”

The company, along with processing partners and battery clients, is aggressively expanding capacity, and the cylindrical secondary battery market is also increasing its market share within the form factor, centered on domestic companies. Considering this, the company, as the exclusive domestic supplier of materials, is expected to continue benefiting.

This year, the company’s projected sales are 816.7 billion KRW, and operating profit is expected to grow by 19% and 60%, respectively, compared to the same period last year. Researcher Sim explained, “The current stock price is based on a price-to-earnings ratio (PER) of 8.8 times for this year’s expected performance and 5.7 times for next year’s expected performance. As a monopolistic operator within the secondary battery industry, the valuation is expected to increase.”