[Click eStock] "JSTEC Expects Over 1 Trillion Won Order from India Secondary Battery Project"

DS Investment & Securities analyzed on the 26th that JSTEC is expected to benefit from IBC's battery factory construction project in India, with orders exceeding 1 trillion KRW anticipated. No investment opinion or target price was provided.

DS Investment & Securities expects JSTEC to benefit from IBC's battery factory project in India. IBC supplies batteries to leading global automobile manufacturers such as Tesla, BMW, Ford, and GM. IBC is a company producing the exclusively developed I-NMC prismatic cells at its gigafactory in India. JSTEC holds a 20% stake in IBC.

Researcher Taewoo Kwon of DS Investment & Securities stated, "According to foreign media, IBC plans to build a lithium-ion battery factory in Karnataka, India, and establish a 10GWh battery production facility by 2028," adding, "The scale of capital investment is around 1 billion USD, with production starting in 2025 and expanding to 10GWh by 2028." He continued, "The Minister of Industry and Commerce of India mentioned in an interview the signing of a 1 billion USD investment contract with IBC, indicating that the expansion schedule is expected to proceed without issues."

He explained that attention should be paid to JSTEC's turnkey method. He emphasized, "JSTEC carries out development and productization including equipment development and verification together with the client, resulting in no competition," and added, "Due to the nature of turnkey projects, this can lead to large-scale orders."

He explained, "New overseas cell manufacturers prefer bulk orders by process because they lack experience in equipment delivery deadlines, quality verification, vendor management convenience, and individual equipment design," and "For these reasons, overseas companies tend to place larger orders than domestic companies in turnkey project contracts and guarantee appropriate margins to vendors."

In particular, since overseas new companies place larger orders than domestic companies, the secondary battery production facility project of IBC is expected to benefit JSTEC. He emphasized, "Considering JSTEC's supply lead time, at least 1 to 2 GWh orders are expected in 2024," and "Assuming conservatively 100 billion KRW per GWh, the company can expect orders exceeding 1 trillion KRW through this India project, and it is also expected to secure a favorable position in terms of profit margins."