EUGENE INVESTMENT & SECURITIES said on the 29th that while Solus Advanced Materials' short-term results are weak, the company is expected to benefit from having secured a lead in copper foil production in Europe and North America. It kept a target price of 16,000 won and a "buy" rating. The previous trading day's closing price of Solus Advanced Materials was 9,280 won.
In the third quarter of this year, Solus Advanced Materials' revenue rose 8% on-year to 145.1 billion won. At the same time, the operating loss widened to 21.2 billion won. Han Byung-hwa, an analyst at EUGENE INVESTMENT & SECURITIES, said, "Copper foil for batteries sales contracted 34% from a year earlier due to inventory adjustments at European and U.S. clients."
With growing demand for artificial intelligence (AI) accelerators, copper foil sales increased 55%. However, the copper foil division is scheduled to be sold within the year to fund investment in the battery copper foil business.
EUGENE INVESTMENT & SECURITIES noted that the expansion of Solus Advanced Materials' client base is positive. Han said, "In addition to the four existing clients, four more were added this year, and by the end of next year the client base will reach 10."
For copper foil for batteries bound for energy storage systems (ESS), supply has begun to a K-battery company in Europe, and in the United States the company plans to supply K-battery makers and the largest local player.
Han said, "Testing is underway to supply a new item for 4680 cylindrical batteries, and revenue will be generated in the second half of next year."
He added, "Short-term results are lacking, but the benefits of having secured a lead in copper foil for batteries production in Europe and North America are expected to emerge."