EV materials maker EcoPro tops the buy list of Korean stocks

Shares in EcoPro BM Co., a cathode material maker used in electric vehicle batteries, topped the list of South Korean stocks, for which an increased number of analysts recently raised their target prices, despite the gloomy outlook for the economy and broader stock markets.

Since hitting its record-high level of 156,600 won ($112.5) in late June of this year, the Kosdaq-listed stock has declined 32% as of Wednesday’s market close.

But it found support from a 254% surge in its second-quarter operating profit to 102.9 billion won, which underscored investors’ optimism for the stock.

Analysts said that EcoPro BM would have plenty of room to gain another 55% over the next 12 months, driven by the growing EV market and stronger-than-expected demand for cathode materials.

Out of the 19 brokerage companies following EcoPro BM, 14 firms have lifted their target prices to an average of 165,748 won between June 3 and Sept. 13.

However, five other firms cut their target prices amid concerns of an economic slowdown. EcoPro BM is the second-largest stock on the junior Kosdaq market with a market cap of 10 trillion won.

Celltrion Inc., a biosimilar maker, ranks high on the list of stocks expected to buck the trend as well. The stock with a market cap of 25 trillion won decreased almost 20% so far this year.

Twelve out of the 13 brokerage firms that cover Celltrion bet on a rebound in the stock. Only one firm cut its target price.

Their consensus price target has been adjusted higher to 255,000 won, up nearly 40% from the current level. Celltrion's robust second-quarter results allayed investors’ concerns about its business outlook.

	Consensus target price	Upside potential compared with Sept. 13 closing level
EcoPro BM	165,748 won	53%
Celltrion	255,000 won	36.7%
LG H&H	895,000 won	29.7%
Daewoo Pharma	232,308 won	36.6%
Hankook Tire & Technology	49,083	19.5%
BH	40,231	22.5%
Hyundai Fire & Marine Insurance	43,750 won	40%
Period: Between June 13 and Sept. 13
Source: FnGuide

By contrast, the country's dominant online platforms Naver Corp. and Kakao Corp. have fallen out of favor on the view that their businesses might be close to peaking.

Both of the stocks led the market rally in 2020 as the stay-at-home trend following the onset of the COVID-19 pandemic meant more time spent in front of computers and mobile phones.

Twenty brokerage firms slashed their target prices for Naver, while 16 analysts lowered target prices on Kakao.

Among others, LG Display Co., Hyundai Steel, Hyundai Engineering & Construction Co., SK Bioscience Co. and Hansae Co. saw their target prices cut by more than 10 brokerage houses, respectively.

Hansae is a contract clothing manufacturer for global brands such as GAP, Old Navy and H&M.

Write to Eui-Myung Park at uimyung@hankyung.com
Yeonhee Kim edited this article.