Chunbo (A27828) Q2 2024 earnings summary

Executive summary

• Focus on advanced materials for secondary batteries, semiconductors, displays, and pharmaceutical intermediates, with global clients in EV and electronics sectors.

• Recent completion and expansion of new plants in Chungju and Gunsan for lithium-ion battery (LIB) materials, expanding production capacity.

• Revenue for H1 2024 was ₩75.7 billion, down 24% year-over-year, with operating loss of ₩26.2 billion and net loss of ₩48.9 billion.

• The company maintains a strong R&D focus, with ongoing investments in new production facilities and a robust patent portfolio.

• Emphasis on proprietary technology, cost reduction, and eco-friendly manufacturing, including recycling and waste minimization.

Financial highlights

• 2024 2Q sales were ₩75,678 million, down from ₩182,698 million in 2023 and ₩328,859 million in 2022.

• Gross profit turned negative in 2023 (₩-369 million) and further declined to ₩-21,757 million in 2024 2Q.

• Operating income dropped from ₩56,473 million in 2022 to ₩-8,045 million in 2023 and ₩-26,235 million in 2024 2Q.

• Net income fell from ₩42,836 million in 2022 to ₩-45,466 million in 2023 and ₩-48,909 million in 2024 2Q.

• Cash and cash equivalents at period end: ₩43.7 billion; total assets: ₩942.7 billion as of June 2024.

Outlook and guidance

• LIB and electrolyte markets forecast strong growth through 2030, driven by EV adoption and regulatory targets.

• Management expects continued pressure on secondary battery materials but anticipates stabilization as new production lines ramp up.

• Commercial production at new plants began in 2024, with government subsidies and tax incentives supporting profitability.

• Targeting a 25% operating profit ratio for new lithium salt products through cost innovation and process optimization.

• Ongoing cost control and efficiency improvements are planned.