[Market Focus] Is the Golden Age of Aluminum Foil Coming?... DI Dongil Jumps Over 7%

Shares of DI Dongil are up more than 7% on expectations of rising demand for aluminum foil, which had previously drawn little attention in the battery market.

As of 10:38 a.m. on the 19th, DI Dongil was trading at 24,950 won, up 1,650 won (7.08%).

Eugene Investment & Securities maintained its "Buy" investment rating and its target price of 40,000 won for DI Dongil on this day.

Han Byunghwa, an analyst at Eugene Investment & Securities, said, "DI Dongil's sales and operating profit for this year are projected at 688.8 billion won and 12.3 billion won, respectively, with operating profit turning to black," adding, "This is because the one-off costs related to the merger of its subsidiary Dongil Aluminium, which was the main cause of last year's weak earnings, and the operating losses at its environmental plant subsidiaries are estimated to disappear this year."

Han said, "Sales of coated aluminum foil for lithium iron phosphate (LFP) batteries used in battery energy storage systems (BESS) are increasing, and sales in the aluminum foil division are expected to reach 278 billion won this year, up 24% year-on-year," adding, "Sales at the environmental plant subsidiaries are also expected to recover from about 21 billion won last year to around 51 billion won this year."

He added, "Sales at Plasmatech, which supplies exhaust gas reduction equipment for semiconductor production facilities and whose main customer is Samsung Semiconductor, are recovering as Samsung resumes capacity expansion, and Dongil C&E, which supplies environmental facilities to display manufacturers, appears to have secured new customers."

Han particularly focused on the growth potential of aluminum foil. He said, "Although the aluminum market is smaller in scale, with prices at about one-quarter of those of copper, future advances in battery technology are evolving in a way that is highly favorable to aluminum foil," adding, "Aluminum foil is used for both the cathode and anode in sodium batteries, which are highly likely to become the standard for next-generation mass-market batteries, and its use in all-solid-state batteries is virtually confirmed."

He went on to say, "The amount of battery aluminum foil required per 1 GWh is about 300 to 400 tons for ternary batteries, 400 to 600 tons for LFP batteries, and 700 to 1,000 tons for sodium batteries."