[Alpha Biz= Reporter Kim Sangjin] Eugene Investment & Securities lowered its target price for Cheonbo (278280), a secondary battery material company, by 41% on the 24th.
Cheonbo recorded sales of 39.7 billion KRW and an operating loss of 27.6 billion KRW in the first quarter. Compared to the same period last year, sales decreased by 15%, and the company turned to a loss.
Eugene Investment & Securities explained, "The large-scale loss was due to the reflection of a 21 billion KRW loss from the sharp drop in raw material prices and inventory valuation losses." They added, "Even excluding this, the operating loss was 6.6 billion KRW, indicating that the business environment is not favorable."
Furthermore, Eugene Investment & Securities noted, "Cheonbo reduced the expansion of its F electrolyte production from 10,000 tons to 2,500 tons, and the production of FEC and VC electrolytes from 5,000 tons each to 1,000 tons each." They predicted, "This year, the company's production capacity will decrease from the previous 32,000 tons to 12,000 tons."
As a result, Eugene Investment & Securities adjusted Cheonbo's target price from 170,000 KRW to 100,000 KRW.
Despite the short-term downturn, Eugene Investment & Securities maintained a 'Buy' rating, stating, "The demand for special electrolytes will grow structurally due to the expansion of long-term electric vehicle demand."
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
