[Click eStock] DoubleUCP Target Price Halved

On the 17th, DB Securities significantly lowered the target price of WCP, a separator manufacturer for secondary batteries, to 12,000 KRW, half of the previous target, citing "expected performance deterioration this year due to a decline in customer plant operating rates."

WCP is a manufacturer and seller of separators, one of the four core materials of secondary batteries. Its main products are wet separators and ceramic-coated separators for electric vehicle (EV) secondary batteries. These separators are used in various types of secondary batteries, including EV batteries, small batteries, and energy storage systems (ESS), depending on customer requirements.

DB Securities forecasted that WCP's sales in the first quarter of this year will sharply drop by 86% year-on-year to 17.4 billion KRW. Operating losses are also expected to continue at 47.8 billion KRW. DB Securities estimated that WCP's separator operating rate, which closely follows the operating rate of Samsung SDI's Hungary plant, is at around 20-30%.

DB Securities projected WCP's sales for this year to decrease by 50% year-on-year to 160.6 billion KRW, with operating losses continuing at 112.5 billion KRW. However, they expect performance to enter a full recovery phase next year, with sales increasing by 182% year-on-year to 453.6 billion KRW and operating profit turning positive at 52.4 billion KRW.

DB Securities drastically lowered WCP's target price from 24,000 KRW, set on October 21 last year, to 12,000 KRW. However, the investment opinion was maintained as 'BUY.'

Analyst An Hoisoo stated, "Due to high dependence on a single customer and unclear benefits from the trend of excluding Chinese materials, the stock price has continued to decline," adding, "Although the target price was lowered considering the difficult market conditions and competitive environment, it remains one of the most undervalued material companies."