Daol Investment & Securities said on the 9th that it is necessary to change the assumption that demand for the electric vehicle market could accelerate due to the recent rise in oil prices in relation to EcoPro BM. It raised its target price to 270,000 won from 200,000 won and maintained a Buy rating. EcoPro BM closed the previous trading day at 202,500 won.
Yoo Ji-woong, an analyst at Daol Investment & Securities, said, "In Europe, the three-year grace period for applying CO2 emissions regulations ends in 2028," and "traditional original equipment manufacturers (OEMs) will begin rushing to launch electric vehicles (EVs), focusing on the small and midsize segments, starting this year."
In particular, the European Union (EU) draft of the Industrial Acceleration Act (IAA) announced last week includes a mandate to produce batteries within Europe. From the perspective of automakers, it is a structure in which demand for localized cathode materials is bound to surge.
Yoo said, "The IAA requires that at least three or more of the key battery components, including materials, be produced within Europe, and this increases to five by 2030."
Europe's IAA is developing subsidies targeted mainly at supporting public-purpose vehicles. Yoo said, "Given the characteristics of the European market, EVs account for more than 50% of fleet vehicles (Fleet: vehicles supplied in large quantities to corporations such as governments, car-sharing companies, and rental car companies), so automakers are naturally in a structure where they have no choice but to demand localization of the battery value chain," adding, "EcoPro BM is the only domestic cathode materials corporations to have secured localization in Europe."
Yoo also said, "Operating profit is expected to improve from the second half of this year, so the momentum itself is not great, but due to the intersection of a rapid change in the oil price environment and a policy drive, a valuation premium is expected for EcoPro BM's production base in Hungary."
He added, "European policy announcements and the opening of the robot market will form new share-price momentum."