[Click eStock] "SK Materials, Continued Earnings Improvement in H2 ... Target Price Up 50%"

Korea Investment & Securities Report
Operating Profit Expected to Reach 249.6 Billion KRW This Year, Up 12% YoY

[Asia Economy Reporter Minji Lee] Korea Investment & Securities maintained a buy rating on SK Materials on the 17th and raised the target price by 50% from the previous level to 300,000 KRW.

Yoo Jong-woo, a researcher at Korea Investment & Securities, explained, "Despite concerns about COVID-19 in the first quarter, the company posted results that exceeded market expectations and met expectations in the second quarter as well. It is also positive that the company reduces volatility in the specialty gases business through subsidiary growth and shows a continuous profit increase."

In the second quarter, SK Materials recorded sales of 227.5 billion KRW and operating profit of 55.6 billion KRW, up 24% and 3% respectively compared to a year earlier. Shipments of specialty gases, including NF3 for semiconductors, increased, and sales of subsidiaries SK Trichem and SK Showa Denko showed an upward trend.

The company began mass production of semiconductor-grade hydrogen fluoride gas in June. Since Japan's export restrictions on materials started in July last year, the localization of hydrogen fluoride gas, one of the most closely watched materials, has begun. While companies like Soulbrain have started localizing liquid hydrogen fluoride, the market for gaseous hydrogen fluoride is smaller, and separate facility investments are required from liquid, so domestic companies have not actively pursued it.

Researcher Yoo Jong-woo said, "SK Materials began developing gaseous hydrogen fluoride even before Japan's export restrictions and quickly started mass production. They will increase supply to Samsung Electronics and SK Hynix."

It is expected that the performance improvement in the second half of the year will be greater than in the first half. From the end of the third quarter, SK Airgas will begin supplying to SK Hynix's M16 new plant, so the performance improvement in the second half is expected to be greater than in the first half. Third-quarter sales are expected to be 242.9 billion KRW and operating profit 63.1 billion KRW, up 6% and 11% respectively from the second quarter. Annual sales are expected to reach 929.5 billion KRW and operating profit 240.6 billion KRW, up 20% and 12% respectively compared to a year earlier.

This content was produced with the assistance of AI translation services.