[Weekly HOT Stocks] SK Materials, Stock Price Rises 24% with 5 Consecutive Trading Days of Gains

On the 17th, soaring to 248,800 won, hitting a 52-week high record

[Asia Economy Reporter Kum Boryeong] SK Materials has shown a five-day consecutive upward trend. This is thanks to solid performance even in the second quarter, which was most affected by the novel coronavirus disease (COVID-19).

According to the Korea Exchange on the 18th, SK Materials closed the day at 246,000 KRW. During the session, the price surged to 248,800 KRW, setting a new 52-week high.

The stock price rose every day throughout the week without exception. Considering the closing price of 198,700 KRW on the 10th, it increased by 23.8% over five trading days.

SK Materials posted strong results in the second quarter. The second-quarter sales were 227.5 billion KRW, and operating profit was 56.6 billion KRW, as disclosed. Compared to the previous year, sales increased by 24.3%, and operating profit rose by 2.8%. Compared to the previous quarter, they increased by 7.1% and 6.5%, respectively.

Researcher Lee Soonhak of Hanwha Investment & Securities explained, "Specialty gases showed stable prices, and shipment volume slightly increased. SK Trichem's sales grew by 10% compared to the previous quarter, showing a growth rate beyond expectations. SK Showa Denko and Hanyu Chemical also achieved 10% sales growth compared to the previous quarter, meeting guidance." On the other hand, SK Airgas experienced a decline due to decreased sales to customers in the refining sector, but sales are expected to increase significantly with the construction of a cleanroom in the M16 plant in the second half of the year.

The operating profit growth cycle is expected to continue into the third quarter of this year. SK Materials' customers resumed investments starting from the third quarter of last year after a slump in memory semiconductors. Since the second quarter of this year, it has entered a profit cycle. Researcher Lee Jongwook of Samsung Securities said, "Considering the expansion cycle until the first half of this year, the profit cycle is expected to continue until the first quarter of next year. Especially, the third quarter of this year is expected to set a record for the highest quarterly profit due to the peak season, profit cycle, and the base effect from the third quarter of last year. This profit cycle will peak in the fourth quarter of this year," he analyzed.

The decision to repurchase treasury shares also contributed to the stock price increase. SK Materials announced on the 16th that it decided to repurchase treasury shares worth 118.5 billion KRW to enhance shareholder value. Researcher Lee Soonhak said, "The decision to repurchase treasury shares at the current stock price also reflects the company's high confidence."

Securities firms have raised their target prices for SK Materials. Hanwha Investment & Securities raised the target price from 200,000 KRW to 280,000 KRW, Samsung Securities from 200,000 KRW to 270,000 KRW, and Shinhan Financial Investment from 250,000 KRW to 270,000 KRW.

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