Hana Securities, Ecopro BM target price ↓… “Decreased battery shipments in Europe”
Fourth quarter operating loss expected to be KRW 10.3 billion, loss expected for the first time in eight quarters
Quick Look
- Hana Securities predicted a decline in Ecopro BM's fourth quarter performance and lowered its target stock price from 154,000 won to 112,000 won.
- The customer's sluggish shipment of electric vehicles to Europe and the burden of fixed costs at the Hungarian plant were cited as factors for worsening performance, but it is expected that it will be possible to secure profitability through increased shipments from the European plant and the smelting business from 2028.
AI-generated summary
Why It Matters
Hana Securities released an investment report on Ecopro BM and lowered its target stock price. The client's sluggish shipment of electric vehicles to Europe and the fixed cost burden due to the suspension of operations at the Hungarian plant were cited as factors for worsening performance.
On the 10th, Hana Securities lowered its target stock price for Ecopro BM [247540] from 154,000 won to 112,000 won, predicting a decrease in fourth quarter performance due to the client's sluggish shipments in Europe. The investment opinion was maintained at Buy.
Researcher Kim Hyun-soo analyzed in the report that day, "Ecopro BM recorded an operating loss of 10.3 billion won in the fourth quarter and is expected to turn red for the first time in eight quarters. A decrease in sales will be inevitable due to the continued sluggish shipments of our customer's European electric vehicle (EV) sector."
He said, "Reflecting the sluggish shipment of Korean batteries in Europe, we are also lowering Ecopro BM's cathode material shipment forecast. It will be 60,000 tons this year, 68,000 tons next year, and 99,000 tons the year after."
In addition, it was predicted that “while the fixed cost burden increases due to the suspension of operations at the Hungarian plant, profitability will also deteriorate as one-off profits such as lagging (the lag effect of raw material input) and capitalization of development costs due to the rise in metal prices in the third quarter disappear.”
However, it is expected that shipments will increase by 2028 and that it will be possible to secure profitability through the smelting business in the future.
Researcher Kim pointed out, "In 2028, Ecopro BM's European factory shipments are likely to increase rapidly due to Samsung SDI [006400]'s entry into new projects in Europe and the application of industry acceleration laws. This may lead to higher forecasts and higher corporate value evaluation factors."
He then explained, “The profit value of the nickel smelter, which is scheduled to be shipped from the second quarter of next year, has not yet been reflected, but if all goes as planned, it is possible to contribute at least 300 billion won to operating profit based on 90,000 tons per year.”
Ecopro BM's closing price the previous day was 75,900 won.
What to Watch
AI outlook — possibilities, not facts
Ecopro BM's European factory shipments will increase rapidly in 2028.
Possible · Within months
Nickel smelter profits will contribute to annual operating profit of at least 300 billion won.
Possible · Within months
Open Questions
- When is Ecopro BM’s fourth quarter earnings release schedule?
- How long will the Hungarian plant be shut down?
- Has the nickel smelter's scheduled operation date been confirmed as the second quarter of next year?
