[Click eStock] "POSCO Future M, 'Anode Material Volume Decrease' Earnings & Target Price Down"

On the 29th, Samsung Securities downgraded its second-quarter earnings forecast and target price for POSCO Future M. The supply volume of the NCM (Nickel-Cobalt-Manganese) cathode material product ‘N65 (65% nickel content)’ has decreased, and the recovery speed of cathode material sales is slower than expected.

Jang Jeong-hoon, a senior analyst at Samsung Securities, forecasted that POSCO Future M will achieve consolidated sales of 1.1 trillion KRW and operating profit of 19 billion KRW in the second quarter. This is slightly below the previous forecast. For the full year, he also lowered the estimates to sales of 4.8 trillion KRW and operating profit of 134.1 billion KRW.

Analyst Jang explained, "Second-quarter cathode material sales are expected to be 703.3 billion KRW, down 4% from the first quarter, and operating profit is expected to be around 7 billion KRW, lower than the previous estimate of 17.9 billion KRW," adding, "The energy materials segment, including the anode material division, is generally in an adjustment phase."

He added, "High-nickel ‘high-nickel’ products are mainly supplied to Ultium Cells, a battery joint venture between LG Energy Solution and General Motors (GM), but GM lowered its annual electric vehicle sales plan in June from 200,000?300,000 units to 200,000?250,000 units."

He analyzed, "Nevertheless, POSCO Future M’s annual shipment guidance has not changed," and said, "If Ultium Cells takes all the contracted volume, a significantly large inventory will accumulate, so it is necessary to monitor whether shipments will continue in the future."

He advised, "Until a performance momentum occurs due to improved operating rates from increased customer volume, it is necessary to be cautious about newly purchasing POSCO Future M shares."