Eugene Investment & Securities said on the 18th that SungEel HiTech has been steadily working to secure scrap through partner networks, and that as a result the operating rate of domestic hydro centers is rising, raising expectations for a turnaround in earnings.
It also raised its target price to 73,000 won from 54,000 won and maintained its "buy" rating. The previous trading day's closing price of SungEel HiTech was 56,300 won.
SungEel HiTech posted consolidated revenue of 53.4 billion won and an operating loss of 9.3 billion won in the fourth quarter of last year. The operating loss continued but decreased 63.5% from a year earlier.
Park Jong-seon, an analyst at Eugene Investment & Securities, said, "Hydro Centers 1 and 2 have halted operations, and high-purity battery materials are being produced mainly at the more efficient Saemangeum Plant 3," and added, "The current utilization rate of Plant 3 has reached the 75%–80% range, and we expect 100% around May–June."
Plant 2 is scheduled to resume operations after completing modifications to improve production yield. Eugene Investment & Securities projected that when Plant 3's utilization reaches 100%, quarterly revenue will be around 75 billion won, and in the second half, results will improve with the operation of Plants 2 and 3.
This year's consolidated revenue is estimated at 300.2 billion won, up 54.3% from a year earlier, with operating profit of 3.8 billion won. Park explained, "To collect scrap for preprocessing, we have secured 1,600 tons per month through contracts with several companies in North America, Asia and Europe, and we are targeting up to 2,600 tons by year-end, so revenue growth is expected."
He added, "Operating profit in the second quarter will reach the break-even point (BEP), and we could succeed in turning to a profit from the third quarter."