Chunbo’s earnings to improve in 2024 on demand recovery

2023.11.21 16:08:01 | 2023.11.21 16:18:26

[Courtesy of Chunbo]이미지 확대

[Courtesy of Chunbo]

Chunbo Fine Chem Co., a South Korean secondary battery electrolyte developer, will see its earnings improve next year on the back of facility expansion and demand recovery, according to Shinhan Investment Corp. on Tuesday.

Analysts Oh Kang-ho and Park Yoon said in a report that Chunbo Fine Chem’s third-quarter operating profit dropped by 95 percent on year to 800 million won ($620,000), continuing a slump following 1.6 billion won in the first quarter and 1 billion won in the second quarter.

They attributed the performance slump to lowered selling prices and subdued demand, much like the first half of the year.

Chunbo Fine Chem’s stock price has plummeted by 53 percent compared to the beginning of the year due to these factors.

The analysts, however, noted a stabilizing trend in the average selling price of secondary battery products after the first quarter.

They anticipate an acceleration in performance improvement with the stabilization of prices alongside the recovery in demand for secondary batteries.

Moreover, Oh and Park expressed expectations for next year, considering it a crucial period reflecting substantial effects from Chunbo Fine Chem’s facility expansion.

With the expansion anticipated to coincide with price stabilization and improved demand, the analysts predicted Chunbo Fine Chem’s revenue to surge by 60 percent to 310.6 billion won and operating profit 290 percent to 23 billion won.

However, despite these positive prospects, the analysts adjusted their estimated performance figures downward, leading to a revision of their target stock price from to 150,000 won from 300,000 won while maintaining a buy rating.

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