[Weekend Money] Securities Firms Raise Target Price as Operating Profit Surges 823%

EcoPro BM Exceeds First-Quarter Earnings Expectations

In the securities market, a series of upward revisions to the target price for EcoPro BM has been observed. This trend is attributed to stronger-than-expected first-quarter results, along with forecasts of continued growth in both average selling price and sales volume.

According to the financial investment industry on May 3, NH Investment & Securities recently raised its target price for EcoPro BM by 14%, from 246,000 won to 280,000 won. KB Securities increased its target from 250,000 won to 270,000 won, Samsung Securities raised it from 180,000 won to 250,000 won, and iM Securities also boosted its target price from 180,000 won to 220,000 won. Hana Securities set its target at 257,000 won.

Lee Changmin, a researcher at KB Securities, stated, "We have confirmed that earnings have become more resilient on the downside," and explained, "The reason for raising the target price is that we have factored in expectations for growing demand for high-energy-density batteries, such as those used in autonomous vehicles and humanoid robots, and as a result, we have raised the operating profit CAGR (compound annual growth rate) for 2027-2035 from the previous +40% to +42%."

EcoPro BM's operating profit for the first quarter reached 20.9 billion won, a year-on-year increase of 823%. This far exceeded the market consensus of 9.8 billion won. Lee noted, "Cathode material sales volume improved by 20% compared to the previous quarter. This was due to recovery in European electric vehicle sales following the end of inventory adjustments by downstream customers, as well as increased sales to small battery segments such as power tools and BBU, driven by expanded investment in artificial intelligence (AI) infrastructure."

Jang Junghoon, a researcher at Samsung Securities, commented, "There was a one-off factor in the first quarter—an estimated reversal of about 2.9 billion won in provisions. However, as shipments began responding to European EV demand, shipment volume reached 16,500 tons, surpassing expectations." He added, "This improvement in utilization rates, combined with the positive impact of exchange rates, led to better profitability." He went on to say, "With the full-scale operation of the Hungary line and the European region's supply chain prioritization policies, order expansion is expected," upgrading his investment opinion to 'Buy'.

Second-quarter operating profit is also estimated to exceed market consensus. Joo Minwoo of NH Investment & Securities emphasized that EcoPro BM remains a core vendor for Samsung SDI, stating, "The company stands to benefit directly from the recent upward revision in downstream demand forecasts. Expansion of the second plant in Hungary is anticipated in the second half of the year." Joo predicted, "The positive factors that drove strong first-quarter results will continue in the second quarter, sustaining growth in both selling price and sales volume."

However, despite the earnings recovery, some point out that there is considerable valuation pressure on the stock. Jung Wonseok, a researcher at iM Securities, said, "There is potential for short-term price increases depending on supply-demand improvements in the KOSDAQ market or a recovery in investment sentiment for the secondary battery sector overall." However, he noted, "A significant portion of the expectations for mid- to long-term earnings recovery is already reflected in the current share price." He added, "Given that the valuation premium compared to global peers is excessive, it is advisable to refrain from aggressive stock-specific approaches." While iM Securities raised its target price, it maintained its investment rating at 'Hold'.

This content was produced with the assistance of AI translation services.