[Click eStock] "Lotte Energy Materials, Performance Improvement from Q2 This Year... Target Price Up"

Heungkuk Securities maintained a 'Buy' rating on Lotte Energy Materials on the 10th, stating that "positive changes are expected due to new product shipments and mix improvements," and raised the target price to 36,000 KRW.

Heungkuk Securities forecasted that Lotte Energy Materials' sales in the first quarter of this year would decrease by 30.6% year-on-year to 167.9 billion KRW, with an operating loss of 25 billion KRW, turning to a deficit compared to the previous year. Researcher Jeong Jin-su noted, "The impact of customer inventory adjustments is expected to continue through the first quarter of this year, maintaining battery copper foil shipments at the previous quarter's level," adding, "Demand from existing major customers in Europe and North America remains sluggish."

However, a performance recovery is expected from the second quarter of this year with full-scale shipments. Researcher Jeong said, "Some rebound demand for the sharply declined battery copper foil shipments may be reflected, and flexible demand recovery is anticipated due to full-scale shipments to new customers." He continued, "We are currently operating at low capacity to reduce our own inventory levels, and the inventory, which was equivalent to three months' worth in the first half of last year, is expected to shrink to a maximum of 1.5 months from the second quarter of this year," adding, "This prepares us to respond flexibly during periods when inventory replenishment demand occurs."

He evaluated, "Next year, many positive changes are expected, including high-end copper foil supply, recovery of domestic plant operation rates, and easing of price competition originating from China," emphasizing, "In particular, through active responses such as expanding new demand channels and low-rate operation, we are well prepared for future inventory replenishment cycles."