POSCO Future M: 2Q OP in-line; concerns about the earnings trajectory; stay Underweight

研报英文原文证据摘录

POSCO Future M: 2Q OP in-line; concerns about the earnings trajectory; stay Underweight

26E 2027E

Q1 635 30A 77

• Key earnings call takeaways. Management expects 2H cathode volumes to Q2 (459) 260 126

improve on: 1) some deferred cathode volumes returning; 2) resilient SDI- Q3 546 63 177

Q4 (303) 71 229

bound NCA demand for ESS and powertools; and 3) stronger portable battery FY 363 424 608

demand into 2H (to non-captive customers). The company guided to initial

LFP cathode entry in late 2026, followed by a 2027 start-up of the LFP cathode Style Exposure

JV with CNGR.

• Our concern is about the company’s earnings trajectory. We agree with

management that volumes should grow, but we expect margins to remain

muted as competition intensifies: 1) in SDI-bound ESS and powertool

cathodes, PFM faces rising competition from Ecopro BM; and 2) incremental

portable battery customers are likely to be lower-margin given relatively low

entry barriers. In addition, the company has yet to secure a meaningful anchor

contract for LFP cathodes, which limits visibility in our view.

• Valuation multiples shift to a 25x down-cycle EV/EBITDA. Since July,

PFM shares have corrected by -24% (vs. KOSPI -34% and the average of four

other battery supply chain names [LGES, Samsung SDI, Ecopro BM, L&F]

-25%). We view the de-rating as consistent with tighter risk appetite for high-

multiple names. We therefore move from a 40x mid-cycle EV/EBITDA to a

25x down-cycle EV/EBITDA. We see 25x as reasonable vs. the five-year

trading history and our view that PFM can continue to access government

funding and benefit from POSCO Group support, though we acknowledge

further multiple compression is possible if risk appetite worsens.

• Reiterate Underweight. We lift our 2026-28E OP estimates by 2-9%, driven