[Alpha Biz=(Chicago) Reporter Kim Jisun] Shinyoung Securities lowered Chunbo's target price to KRW 126,000. It considered delays in the operation of new lines and reduced initial size. The investment opinion maintained the buy-off.
Shinyoung Securities said, "Cheonbo's sales in the fourth quarter fell 21% from the previous quarter to 39 billion won and operating loss was 11.6 billion won, below the consensus (2.8 billion won)."
It is characterized by reflecting about KRW 8 billion in inventory valuation provisions following a 45% drop in lithium prices in the fourth quarter. Sales of secondary battery materials fell 32% QoQ. It is estimated that the average selling price of electrolytes in the fourth quarter fell by about 10%, while shipments have been low since November due to inventory adjustments by customers at the end of the year. In the case of the operating profit ratio of electronic materials, it recorded -6.6% due to a drop in inventory-oriented sales and operation rates in the semiconductor sector.
This year, Cheonbo's estimated sales rose 36% year-on-year to 247.8 billion won and operating profit was estimated at 13.9 billion won. The figure is 10 percent and 15 percent below the consensus, respectively. The operation of the Saemangeum F electrolyte, which was the main axis of short-term external growth, has been delayed several times due to gas leaks and other factors.
"In the long term, major customers' supply chain departure from China will be maintained, and we expect a gradual recovery in investor sentiment from the second half of the year when the operation of the new line begins," said Shinyoung Securities Co.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
