IBK Securities assessed on the 12th that Ecopro BM is passing through its worst phase and that the demand for cathode materials this year is also uncertain. IBK Securities maintained a 'neutral' investment opinion on Ecopro BM and lowered its target price to 115,000 won.
Ecopro BM disclosed its fourth quarter (October to December) earnings from the previous year the day before. Revenue was 464.9 billion won, with an operating loss of 9.6 billion won. Amid a downturn in the secondary battery industry, the total shipment of cathode materials decreased, resulting in revenue below market expectations.
Research Institute Lee Hyun-wook of IBK Securities noted, "The average selling price (ASP) of cathode materials fell 6% in just one quarter," adding, "Although a reserve for inventory valuation of 12.9 billion won was returned, the burden of fixed costs due to low operating rates resulted in a loss."
Ecopro BM plans to increase its cathode material production capacity (CAPA) from 200,000 tons (t) last year to 218,000 t this year and to 254,000 t by 2026. Correspondingly, cathode material shipments are expected to rise from 68,000 t in 2024 to 95,000 t this year and to 140,000 t by 2026.
The researcher also said, "Demand this year is estimated to be uncertain," adding, "Ecopro BM has projected a 40% increase in its shipment guidance compared to the previous year, and demand is expected to increase centered around major customer SK On."
The researcher further stated, "The prices of cathode materials continue to decline, making an increase in shipments important," and noted, "Although the timing of the market rebound is being pushed back, it is certain that we are passing through the worst phase."