[Click eStock] Daejoo Electronic Materials, Growth Momentum Slows in Second Half... Target Price ↓

On the 21st, Kiwoom Securities lowered the target price of Daejoo Electronic Materials to 135,000 KRW, reflecting adjustments to earnings estimates. The investment opinion was maintained as 'Buy' considering the medium- to long-term growth potential.

In a report released on the same day, Kiwoom Securities analyst Kwon Junsu stated, "We expect third-quarter sales of 56.5 billion KRW and operating profit of 7.6 billion KRW, which is below the market consensus (operating profit of 8.2 billion KRW)." He analyzed, "Operating profit is expected to slightly decrease quarter-on-quarter due to a decline in the operating rate of the silicon anode material division."

For the fourth quarter, sales are projected to reach 64.4 billion KRW and operating profit 8.8 billion KRW. Analyst Kwon explained, "Sales from existing business units such as phosphors and conductive paste are expected to show a gradual upward trend in the fourth quarter; however, sales in the silicon anode material division are anticipated to fall short of initial expectations due to year-end inventory adjustments and continued delays in the launch schedule of electric vehicles in the front end."

Accordingly, this year's performance is forecasted to record sales of 225.4 billion KRW and operating profit of 29.7 billion KRW. While most secondary battery companies experienced poor performance and stock price adjustments in the first half of this year due to overall electric vehicle demand slowdown and deceleration of electrification, Daejoo Electronic Materials recorded earnings and stock price increases exceeding market expectations thanks to new vehicle installations (estimated EV3, Casper) and sample supply effects.

However, in the second half of the year, Daejoo Electronic Materials is also expected to see a weakening growth trend due to the impact of the electric vehicle demand slowdown.

Analyst Kwon said, "In the second half, the company is unlikely to be free from the impact of the electric vehicle demand slowdown, and growth is expected to slow somewhat. However, growth momentum factors such as diversification of silicon anode material customers, increased new vehicle installations, and expansion of applications (for IT use), which are reasons for the company's high multiple, remain valid going forward. Therefore, it is necessary to use the stock price adjustment period as an opportunity for low-price buying."