NH Investment & Securities said on the 5th that for POSCO FUTURE M, a production halt at its key customer Ultium Cells is expected in the first half of this year, making negative growth in cathode and anode material sales volume unavoidable.
At the same time, it cut the target price by 17% to 190,000 won from 230,000 won and maintained its neutral investment opinion. POSCO FUTURE M's closing price in the previous session was 176,900 won.
NH Investment & Securities estimated that POSCO FUTURE M's fourth-quarter revenue last year fell 6.4% on-year to 684.3 billion won, with an operating loss of 6.9 billion won. Due to a sharp drop in sales to Ultium Cells, cathode material sales volume likely fell 46% from the previous quarter, raising the possibility of a swing to the red.
Researcher Joo Min-woo at NH Investment & Securities said, "Natural anode material sales volume appears to have held at the previous quarter's level, but losses will continue due to the burden of fixed costs from low utilization," adding, "For artificial anode materials, a 19 billion won loss is expected as inventory valuation losses are reflected."
Ultium Cells is expected to begin a production halt in the first half due to weak U.S. demand and sluggish inventories. Shipments from Ultium Cells to GM are projected to plunge from 29 GWh last year to 6 GWh this year. As a result, POSCO FUTURE M's total cathode material shipments this year are expected to decrease 10% on-year to 41,000 tons, and natural anode materials are forecast to fall 14% to 18,000 tons.
Joo explained, "There is a profitability defense factor from rising lithium prices, so earnings will show a relatively favorable trend compared with revenue," and "Cathode and anode material results can recover from 2027 thanks to the base effect and the operation of the Pohang lithium iron phosphate (LFP) plant." Joo added, "Given the industry conditions, short-term share price weakness appears unavoidable."