Photo courtesy of Yonhap News

 

[Alpha Biz= Paul Lee] Daol Investment & Securities said on June 9 that EcoPro BM could benefit from rising oil prices and the implementation of the European Union’s new industrial policy, prompting the firm to raise its target price for the stock.

The brokerage maintained a “Buy” recommendation and raised its target price from 200,000 won to 270,000 won.

Researcher Yoo Ji-woong of Daol Investment & Securities said the recent surge in oil prices could accelerate demand in the electric vehicle (EV) market.

He noted that in Europe, the three-year grace period for carbon emission regulations will expire in 2028, prompting traditional automakers to speed up EV launches starting this year.

The anticipated increase in EV demand, combined with the enforcement of the EU’s Industrial Acceleration Act (IAA), is expected to provide broad support for the secondary battery sector, he added.

According to Yoo, the draft of the IAA includes requirements for battery production within Europe, which is likely to increase demand for localized cathode materials.

“EcoPro BM is currently the only Korean cathode material producer that has secured localization in Europe,” he said, referring to the company’s production base in Hungary.

While operating profit improvements are expected from the second half of this year, Yoo said the short-term momentum may be limited. However, he added that the combination of rising oil prices and stronger policy support could justify a valuation premium for EcoPro BM’s Hungarian production facility.

 

 

 

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