Samsung Securities said on the 30th that Sungeel HiTech (KOSPI: 365340), a South Korean battery-recycling specialist, is expected to return to operating profit in the second quarter of 2025 — its first positive quarterly result in 12 quarters.
The brokerage projects second-quarter revenue of 75.8bn won and operating profit of 800m won. The last time the company recorded a quarterly operating profit was in the second quarter of 2023. The forecast is broadly in line with the market consensus of 400m won in operating profit, according to financial data provider FnGuide.
The anticipated turnaround is attributed to two main factors: a rise in black mass feedstock volumes sourced from Europe, and higher prices for lithium and nickel. From the end of the first quarter to late May, lithium prices rose 9% and nickel prices climbed 12%.
Samsung Securities also upgraded its outlook for the second half of the year. Four lithium mines in Yichun, China, have been suspended since May due to delays in renewing their operating licences, with supply disruptions expected to last at least three months. Meanwhile, European spent-battery recyclers continue to increase the volumes of black mass they feed into the processing chain. Black mass — a powder produced by shredding used batteries — is the key raw material that Sungeel HiTech processes to extract lithium, nickel, cobalt, and other battery metals. On the back of these developments, Samsung Securities raised its full-year 2026 operating profit forecast from 7.3bn won to 10.4bn won.
The brokerage nonetheless cut its 12-month target price by 19.6%, from 92,000 won to 74,000 won, reflecting a decline in the average peer-group price-to-earnings multiple for 2026 from 67 times to 58 times. Samsung Securities maintained its Buy recommendation. At the current share price of 52,100 won, the implied upside to the new target stands at 42.0%.
For the longer term, Samsung Securities forecasts revenue of 336.9bn won and operating profit of 10.4bn won in 2026, rising to revenue of 414.8bn won and operating profit of 19.4bn won in 2027.