On the 15th of this month, at mPLUS's Plant 1 located in Cheongju, North Chungcheong Province. After being guided by an official, employees of mPLUS were seen bustling in front of heavy equipment. This was the roll press equipment developed by the company for its new project involving dry electrode processes.
Driven by a method that applies pressure while sending electrodes through rotating rolls, the roll press is next-generation equipment intended to replace the high-temperature and high-pressure pressing equipment (WIP) of existing secondary battery manufacturers. Across from it, there was also a dry room measuring 80 pyeong for testing before delivery to clients. Kim Jong-seok, director of the mPLUS systems business division, noted, "After dry testing the equipment for client delivery, it will be moved, and a separate dry room measuring 30 pyeong for testing self-developed equipment will be established and operated continuously."
mPLUS, a manufacturer of secondary battery equipment, focuses mainly on producing assembly equipment for pouch-type and square-shaped batteries. Currently, it supplies equipment to domestic and international battery corporations, including SK On and LG Energy Solution.
During the assembly process of battery cells, the assembly of electrodes proceeds through three main stages: notching (cutting process), inspection, and stacking. To enhance the productivity of the notching process, mPLUS has developed ultra-fast notching equipment, capable of processing speeds of up to 600 sheets per minute (ppm), and an automatic electrode supply device. A company representative met on site said, "If we introduce the ultra-fast notching equipment, the capital investment expense (CAPEX) can be reduced by 70%, and the operating expense (OPEX) by 30%."
mPLUS explained that the automatic supply device can continuously supply electrodes to the next process, significantly reducing the defect rate compared to manual operation. Previously, the defect level was between 50 to 100 sheets, but with the application of this device, it decreases to 1 to 2 sheets. Equipment replacement takes about 20 seconds.
Starting next year, the company will also mass-produce a smart factory system based on autonomous mobile robots (AMR) that it has developed. The AMR can transport logistics weighing up to 200 kilograms (kg) for small sizes and 1 ton (t) for large sizes, enhancing process efficiency and operational stability. A representative from mPLUS noted, "In the future, when providing a turnkey supply, we plan to offer AMRs to our clients."
mPLUS was founded in 2003 by Kim Jong-seong, who served as head of battery production technology at Samsung SDI and as a consulting team lead. In its early business, mPLUS was recognized for its technology by developing and delivering pouch-type batteries to General Motors (GM) in collaboration with the U.S. Nasdaq-listed A123 Systems. mPLUS was listed on the Korea Securities Dealers Automated Quotations (KOSDAQ) in 2017. Since 2021, the company has also started producing assembly equipment for square-type batteries in addition to its existing pouch-type battery equipment.
However, mPLUS could not escape the effects of the electric vehicle chasm (temporary demand stall). Last year, mPLUS recorded a 62% and 58% decline in sales and operating profit, respectively, to 128.7 billion won and 10.1 billion won due to sluggish secondary battery market conditions and delays in delivery schedules. The stock price, which exceeded 13,000 won last June, fell to the 7,000 won range starting from the end of last year.
To overcome this, mPLUS aims for profitability-centered management based on its technological capabilities. It plans to strengthen the high-barrier tab welding and packaging businesses and increase the market share of its patented high-speed notching and stacking equipment. In the first quarter of this year, its revenue increased by 7.6% year over year to 23.2 billion won, while operating profit fell by 17% to 2.4 billion won. Although profitability somewhat slowed, the operating profit margin has remained above 10% since last year.
mPLUS expressed confidence that it can significantly boost profitability by the end of the year. As of the end of last month, the order amount totaled 74.4 billion won, achieving the annual order amount from last year (74.4 billion won) in just four months. The company forecasts that its order amount this year will exceed its annual order target of 170.6 billion won.
Additionally, mPLUS is pursuing the construction of a new factory alongside its currently operating Plants 1 and 2 in Cheongju. The new factory aims to commence operations by the end of 2027. The company expects that when all three factories are operational, its production capacity (CAPA) will triple compared to the current level.
mPLUS has also started communicating with shareholders. At the end of March, mPLUS announced through its corporate value enhancement plan that it will increase its share of new business orders for dry electrode process equipment and square-type batteries, aiming to raise its average annual revenue by more than 50% by 2028. The target is to achieve revenue of 700 billion won by 2028.
The company also presented a shareholder return policy. It plans to maintain a dividend payout ratio of at least 10% until 2027 and will also initiate additional purchases and retirements of its remaining 335,047 shares. The company plans to retire the 1 billion won worth of shares acquired last year within the first half of this year.
Regarding the dividend payout ratio, there is not much difference from last year's payout ratio (10.9%). In this regard, mPLUS explained that it wants to be recognized as a growth stock rather than a dividend stock. Park Jung-ah, chief financial officer (CFO) of mPLUS, said, "We will be recognized for our corporate value through high profit margins and will return that value to shareholders through stock price increases."
Some have raised concerns about cash liquidity. Last October, mPLUS issued a convertible bond (CB) totaling 25 billion won in its fourth and fifth rounds. As of the 16th, the conversion price of the two CBs (10,656 won) was approximately 30% lower than the closing price (7,450 won). If the stock price does not rise by next October, the possibility of exercising the put option becomes greater.
However, mPLUS has stated that it currently holds sufficient cash, so the risk of cash outflows from the CBs is not significant. According to the company, mPLUS's cash assets totaled 110 billion won as of the end of the first quarter.