[Click eStock] "Gangwon Energy, Plant Turnaround + Secondary Battery Sales Becoming Visible"

Hyundai Motor Securities analyzed on the 24th that Gangwon Energy's stock price could be re-rated considering the full-scale turnaround in the plant sector and the sales visibility of secondary battery equipment and materials.

Minjung Kwak, a researcher at Hyundai Motor Securities, stated in a report on the same day, “The investment points of Gangwon Energy include an increase in sales due to the full-scale turnaround of the core plant business starting this year, the establishment of the entire mixing process system, which is a key process for the quality of secondary battery electrodes, expectations for expanded orders of electric heater dryers, which are key equipment in the cathode material process, and the expansion of engineering orders for the cathode material pre-process by its subsidiary Gangwon Esolution, along with the full-scale mass production of anhydrous lithium hydroxide, a core secondary battery material.”

Accordingly, researcher Minjung Kwak forecasted that Gangwon Energy’s performance this year will see sales of 513.5 billion KRW and operating profit of 35.4 billion KRW, representing increases of 446.3% and 686.7% respectively compared to the previous year.

She said, “The plant sector of Gangwon Energy recorded sales of 46.4 billion KRW last year, but it is expected to reach around 60 billion KRW this year,” adding, “Operating profit also turned positive last year and is expected to continue to be profitable this year.”

Furthermore, she analyzed, “The sulfur recovery facility, where Gangwon Energy holds the strongest competitiveness, recovers high-purity sulfur from hydrogen sulfide generated during crude oil refining, making it an essential core facility for petrochemical refining plants in terms of sulfur recycling and environmental protection,” and added, “Continuous orders are expected thanks to the increasing investment in petrochemical refining plant facilities in the Middle East.”

In addition, she explained, “All three domestic cathode material companies have expansion plans, and the electric heater dryer is a highly likely item for orders. Gangwon Energy’s electric heater dryer uses specially treated electric cables wound directly onto the dryer, which eliminates the risk of short circuits or wire faults compared to competitors, offers excellent thermal efficiency, and reduces operating costs by about 30%. Its subsidiary Gangwon Esolution invested 8 billion KRW through a paid-in capital increase in August last year to build a production plant for lithium hydroxide and cathode material additives, which is scheduled to be completed in early October, with a capacity to produce 1,000 tons of lithium hydroxide per month.”