[Click eStock] "EcoPro BM, Earnings Outlook Downgraded... Target Price ↓"

NH Investment & Securities downgraded its earnings forecast for EcoPro BM on the 27th. However, it maintained a 'Buy' rating and adjusted the target price down by 24% to 250,000 KRW.

Joo Min-woo, a researcher at NH Investment & Securities, stated, "We have reflected the downward revision of earnings forecasts that could not be incorporated during the investigation restriction period (Q2 to Q3 2024). Due to inventory adjustments caused by a slowdown in sales to electric vehicles (EVs), earnings in 2024 are expected to decline rapidly."

NH Investment & Securities projected EcoPro BM's Q3 sales to decrease by 69% year-on-year to 566.9 billion KRW, with an operating loss of 17 billion KRW. Both sales (755.1 billion KRW) and operating profit (3 billion KRW) are expected to fall short of market consensus.

Researcher Joo assessed, "Although a recovery in NCM sales is expected with the start of operations at the new joint factory of Ford and SK On (BOSK) in 2025, it remains uncertain whether the final customers' EV sales will support this."

Particular attention should be paid to the announcement of the mid- to long-term competitiveness enhancement strategy in Q4. It is anticipated that there will be mentions of expanding the scope of Ni vertical integration within affiliates to improve cost competitiveness and changes to major production bases.

Researcher Joo analyzed, "If this strategy is realized, it could further reduce cathode material costs by 11%. We expect Q4 earnings to improve compared to Q3."