[Click eStock] Ecopro BM Expected to Maintain Profits in Second Half

On August 6, Hana Securities projected that Ecopro BM would continue to post profits in the second half of this year. The investment opinion was set to 'Buy,' and the target price was raised to 151,000 won.

In the second quarter of this year, Ecopro BM recorded sales of 779.7 billion won and an operating profit of 49 billion won. Compared to the same period last year, sales decreased by 3%, but operating profit increased by 1,159%.

Kim Hyunsoo, a researcher at Hana Securities, explained, "In terms of profitability, the fair value gain from the Indonesian smelting plant of the investment subsidiary was reflected in the consolidated sales and operating profit. In addition, the reversal of inventory valuation losses contributed to a significant quarter-on-quarter increase in the operating profit margin."

He added, "Inventory indicators have improved significantly. The inventory turnover ratio has recovered to the 2023 level, and inventory days have decreased for two consecutive quarters."

It is estimated that in the third quarter of this year, Ecopro BM will achieve sales of 798.4 billion won and an operating profit of 54.3 billion won. Compared to the same period last year, sales are expected to increase by 53%, and operating profit is expected to turn to a surplus. Kim analyzed, "With growing demand for Samsung SDI ESS products and the effect of new vehicle launches in North America, shipments of cathode materials will increase quarter-on-quarter."

He emphasized, "During the period of profit turnaround and sales growth, it is possible to apply a price-earnings ratio (PER) of 30 times, which is the lower end of the multiple during past periods of earnings growth, in line with the upward revision of earnings estimates."