Orders to Come in Sound Next Year
The author is an analyst of NH Investment & Securities. He can be reached at kyeongkeun.kang@nhqv.com. -- Ed.
Onejoon manufactures heat treatment kiln equipment for the production of rechargeable battery materials (cathodes & anodes). Backed by active capacity expansion at rechargeable battery materials makers, Onejoon should enjoy greater orders over the next two~three years. Overhang risks are easing, and orders are forecast to come in sound next year.
Growing alongside rechargeable battery materials-related capacity expansion
Onejoon manufactures heat treatment kiln equipment for the production of rechargeable battery materials (cathodes & anodes). The company has localized the design of roller hearth kiln (RHK) and pusher kiln (PK) equipment used for the production of rechargeable battery materials. It also has a solid track record of supplying its equipment to major industry players such as POSCO Chemical, EcoPro BM, and Daejoo Electronic Materials.
Backed by a capacity expansion cycle for rechargeable battery materials, demand for the firm’s equipment should remain strong over the next two~three years amid robust business conditions (eg, business expansion at major customer POSCO Chemical and the winning of large-scale orders). Of note, currently expanding its business through the obtaining of new clients, POSCO Chemical plans to boost its capacity from 45,000 tons in 2022 to 155,000 tons in 2023, 195,000 tons in 2024, and 465,000 tons in 2025.
Orders to come in sound next year
Onejoon’s share price has tumbled around 60% from its highs since the bonus issue decision in July. We attribute the share price correction to overhang risks and lackluster orders. But, we note that overhang risks have shrunk considerably compared to when the firm went public, as VC stakes in the company have fallen significantly: 19.5% → 1.7% at IBKSEV, 8.8% → 4.8% at POSCO Capital, and 10.8% → 10.0% at Time Ever Welrix.
As of end-3Q22, Onejoon’s order backlog stood at W125.7bn. Orders are expected for kilns for cathode production from a POSCO Chemical-GM JV (Quebec) and kilns for silicon anode production from SK Materials Group14. While it is difficult to predict the timing of order placement, sound orders are likely next year, considering downstream market conditions.