SOUTH KOREA FIRST TO MARKET

Research evidence excerpt

SOUTH KOREA FIRST TO MARKET

Asia Pacific Equity Research

South Korea First to Market 03 August 2026

Top Stories

| Ecopro BM (Sonny Lee) (247540 KS, UW)

2Q OP a miss; end market contracting, competition intensifying; downgrade to Underweight

Ecopro BM’s (EBM) 2Q OP missed JPMe/BBGe, led by weaker EV cathode revenue from the US/Europe and a sharp ESS-

bound revenue decline, as SDI appears to be dual-sourcing ESS cathodes with Posco Future M (PFM). With US volumes likely

to be subdued and Europe EV visibility still limited, we see EBM’s addressable end market contracting while competition

intensifies: PFM appears to be taking share in ESS and is also guiding entry into cylindrical cathodes, potentially diluting EBM’s

volume/profit outlook. We see downside risk to the company’s Hungary expansion, given the cost competitiveness of Korea-

made cathodes and potential regulatory relaxation. Reflecting tighter risk appetite, we de-rate to a 25x down-cycle EV/EBITDA

(from 40x) and cut our Dec-27 PT to W62,000; downgrade to Underweight.

Hanwha Aerospace (Simon Han) (012450 KS, OW)

2Q26 OP strong with standout export margins; ammunition and missiles are next leg of upgrades

Hanwha Aerospace’s 2Q26 OP was a beat (17%/41% above JPMe/Street), but even after factoring in beats from Hanwha

Ocean/Hanwha Systems, it was in line with our bullish estimates. Export land systems OPM was the key highlight at a high-

30%, easing worries over potential margin erosion from an adverse Poland/non-Poland sales mix. For 2H26, the company

guided to a robust sales and OP trajectory on strong Poland deliveries (K9/rockets/ammunition) alongside expanded execution

across other projects. On orders, the only disappointment was the US howitzer award timing slipping to August (from July),