LOTTE Energy Materials shares continued to rise more than 7% early on the 11th. The stock is seen gaining on growing expectations for future earnings improvement as the large-capacity energy storage system (ESS) and artificial intelligence (AI) circuit foil businesses expand.
As of 9:52 a.m. that day, LOTTE Energy Materials stock was trading at 34,500 won on the Korea Exchange, up 7.81% (2,500 won) from the previous session.
Kim Ye-rim, a researcher at Korea Investment & Securities, said, "Operating losses are expected to continue through the first half of next year, but earnings will gradually improve with this quarter as the bottom."
Kim analyzed that a higher revenue share from ESS will drive the earnings recovery. Kim said, "Demand for electric vehicles (EVs) will slow, but as major clients accelerate the conversion of their lines to ESS-oriented nickel-cobalt-aluminum (NCA) and lithium iron phosphate (LFP), the ESS revenue share is expected to rise to 25% next year."
AI circuit foil is also expected to drive sales growth. Kim added, "Supply of AI-use circuit foil is currently limited, so shipments will expand depending on the speed of production capacity (CAPA) conversion," and "the revenue share will climb from 9.2% this year to 17% next year and 27% in 2027, becoming a key driver of sales growth and profitability improvement."
Earlier, LOTTE Energy Materials disclosed on the 10th that it posted third-quarter sales of 143.7 billion won and an operating loss of 34.3 billion won this year. Sales fell 32% from a year earlier, and the operating loss continued.