[Click eStock] "Sebang Battery, Lead-Acid Battery Supply Shortage... Target Price Upgrade Planned"

DS Investment & Securities announced on the 5th that it plans to revise upward the earnings and target price of Sebang Battery, a comprehensive battery company, from the second quarter onward. This is due to the need to operate at maximum production capacity (CAPA) amid a shortage of lead-acid battery supply, as well as steady demand for AGM (Absorbent Glass Mat) high-efficiency batteries.

Nickel-metal hydride battery for hybrid vehicles

Kim Suhyun, a researcher at DS Investment & Securities, stated in a report on the same day, "As existing lead-acid battery manufacturers switch to AGM, the recent increase in demand has led to a supply shortage in the lead-acid battery market," adding, "Because of this, Sebang Battery must produce lead-acid batteries at maximum capacity until the fourth quarter of this year."

Researcher Kim also noted, "I understand that they are preparing to enter the Japanese market through the establishment of a Japanese subsidiary," and projected, "GS Yuasa, the second largest shareholder, has long served as a supplier to Japanese automaker A, and by leveraging this, Sebang Battery is highly likely to secure a significant volume of orders from company A."

He diagnosed, "Despite the weakening electric vehicle (EV) market, demand for AGM batteries for EVs remains strong," and added, "Sales of AGM batteries for ISG (Idle Stop & Go) systems are surging, and the replacement cycle for hybrid vehicle AGM batteries is approaching, resulting in a continued shortage of AGM supply."

Furthermore, he emphasized, "Thanks to improvements in AGM performance leading to increased sales prices, the company's sales scale is exceeding initial plans," and stated, "After confirming the second quarter earnings, we plan to revise upward the annual earnings estimates and target price for this year."