NH Investment & Securities maintained its "Buy" rating on EcoPro BM on June 25, reflecting expectations for increased production capacity in Europe and investments in Indonesia's MHP (Mixed Hydroxide Precursor). However, the firm lowered its target price from 280,000 won to 240,000 won, a 14% decrease, due to a rise in the risk-free interest rate from 3.0% to 3.6%.
Research analyst Jumin Woo from NH Investment & Securities noted that the introduction of the European Industrial Acceleration Act (IAA) is expected to benefit the company. EcoPro BM is projected to supply cathode materials for Samsung SDI's prismatic batteries for Mercedes-Benz and BMW's 46-pipe batteries from its Hungary factory. Production effects from new volume models such as Hyundai's EV2 and Ioniq 3 are anticipated to begin in the second half of the year.
The possibility of expanding the second factory in Hungary is also being discussed, depending on collaboration with CATL. Additionally, it is understood that EcoPro BM is considering equity investment in the BNSI MHP plant in Indonesia alongside its parent company. NH Investment & Securities estimates that if this project is reflected in consolidated results, it could generate annual sales of approximately 2 trillion won and an operating profit of around 400 billion won based on current MHP prices. Consequently, the forecast for operating profit in 2028 could increase by more than 100% compared to previous estimates.
For the second quarter, EcoPro BM's performance is expected to slightly exceed market expectations. Revenue is projected at 718.8 billion won, an 8% decrease compared to the same period last year but a 19% increase from the previous quarter, while operating profit is expected to remain positive at 24.4 billion won.
The lead analyst stated, "Sales of cathode materials for small batteries to Samsung SDI remain robust, and production of NCMA for new electric vehicle models in Europe has begun. In the second half, plans for funding related to the Hungary expansion and MHP investment will be clarified."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.