[Edaily Reporter Hyera Lee ] On the 2nd, KIWOOM Securities assessed that while EcoPro BM’s ( ECOPRO BM CO., LTD.(247540)) 1.2 trillion won rights offering raises concerns about shareholder value dilution in the short term, it is positive in terms of strengthening the foundation for mid- to long-term earnings through investment in a nickel smelter in Indonesia and the expansion of production capacity in Hungary. However, the firm expressed the view that, given the current market conditions, investors should approach the stock from a mid- to long-term perspective rather than a short-term one.

Kwon Jun-soo, an analyst at KIWOOM Securities, stated in a report released today, “This large-scale rights offering may raise concerns about shareholder value dilution in the short term,” but added, “From a long-term perspective, upstream investments are necessary to improve profitability and enhance earnings visibility.”
ECOPRO BM CO., LTD. announced after the market closed on the 30th of last month that it had decided on a rights offering totaling 1.2 trillion won. The offering will proceed via a rights offering followed by a public offering of unsubscribed shares, with 9,900,990 new common shares to be issued, representing a capital increase ratio of 10.1%. The planned issue price is 121,200 won, reflecting a 20% discount to the reference share price.
Of the funds raised, 7650억 won will be used to invest in a special purpose vehicle (SPV) for the acquisition of a stake in the BNSI (Bahodopi Nickel Smelting Indonesia) nickel smelter in Indonesia. 150 billion won will be used for working capital for mass production at the Hungarian subsidiary and remaining investment costs; 150 billion won will be allocated to the renovation of domestic production facilities and research and development (R&D) for next-generation materials; and the remaining 135 billion won will be used for raw material purchases and working capital.
Researcher Kwon explained, “The core objectives of this fundraising are the investment in Indonesia and the expansion of the Hungarian cathode material plant’s capacity,” adding, “ECOPRO BM CO., LTD. plans to participate as the major shareholder in the BNSI smelter project by securing a combined 39% stake with ECOPRO CO., LTD.”
BNSI is a smelting project with an annual production capacity of 90,000 metric tons of nickel MHP. Researcher Kwon said, “Through this investment, we can stably secure 35,100 metric tons of nickel MHP annually, and we aim to consolidate the smelter’s earnings into our financial statements by the second quarter of 2027.”
He continued, “If our status as a major shareholder is recognized and the inclusion in consolidated financials is finalized, we can expect a consolidated effect of 2.1 trillion won in annual revenue and 425 billion won in operating profit starting in 2028.” He added, “While the exact timing of full earnings reflection remains uncertain, given factors such as the consolidation date and operating rates, our medium- to long-term earnings foundation will be significantly strengthened once this materializes.”
He also highlighted the investment in Hungary as a growth driver. Analyst Kwon explained, “To respond to Europe’s localization policies, we plan to begin operating two production lines at our Hungarian plant (annual capacity of 54,000 metric tons) starting this year,” adding, “As discussions with new clients have recently expanded, we are also considering the expansion of a second plant if necessary.”
Analyst Kwon added, “Once orders from our major client, SAMSUNG SDI CO.,LTD., are reflected in sales and combined with the effect of consolidating the smelter, we expect to see a full-scale improvement in earnings starting in 2028,” noting, “It is necessary to approach this from a medium- to long-term perspective rather than a short-term one.”