[Click eStock] "August Copper Foil Exports Hit Record High... SKC, Short- and Long-Term Performance Expectations"

[Asia Economy Reporter Oh Ju-yeon] Kiwoom Securities maintained its 'Buy' rating and target price of 115,000 KRW for SKC on the 16th, stating that short-term and mid-to-long-term earnings improvements are expected to continue, supported by increased copper foil sales.

According to Kiwoom Securities, SKC's operating profit for the third quarter of this year is expected to be 59.5 billion KRW, a 46.7% increase compared to the previous year, maintaining solid performance.

Researcher Lee Dong-wook analyzed, "The expansion effect of the No.4 plant and increased operating rates of domestic and overseas battery cell makers have led to increased sales and production of the company's copper foil. Although propylene prices, a key raw material for PO/PG, continue to be strong due to increased PP demand, exports of the company's main product PG (especially USP grade) have surged since August." He also explained, "While TPA/MEG prices continue to weaken due to oversupply both regionally and globally, PET film is expected to maintain solid spreads due to increased demand for packaging and industrial use."

In August, domestic copper foil exports reached 2,947 tons, a 23.3% increase year-on-year, setting a new record for the highest export volume for the second consecutive month. Researcher Lee diagnosed, "This appears to be due to improved operating rates of major cell makers located in China, Poland, and other regions."

He forecasted that SKC's operating profit next year will increase by 36.4% to 281.7 billion KRW compared to this year. The mobility materials division is expected to see increased battery foil performance as the No.4 copper foil plant expansion is fully reflected and EV sales expand. The semiconductor materials division, a new growth engine, is also expected to expand with the effects of plant expansion and new materials and customers for Ceramic Parts/CMP.

Additionally, Researcher Lee mentioned the planned construction of the No.5/6 copper foil plants in Jeongeup, expecting additional economies of scale from the expansion. He analyzed, "Following recent domestic and international news, SKC is expected to be pursuing the establishment of the No.7 copper foil plant overseas in Malaysia, the United States, and Europe. Considering the pressure from Chinese competitors' expansion intentions, customer locations, access to low-cost electricity, labor cost reductions, and investment benefits (corporate tax/tax credits/duties/land use), the production capacity mentioned in reports is estimated to be around 60,000 to 80,000 tons."

He added, "For reference, the secondary battery market is expected to grow from 417 GWh this year to 1.6 TWh by 2025," and "The copper foil market (assuming 860 tons per 1 GWh) is also expected to increase from 3 trillion KRW this year to 11 trillion KRW by 2025 in terms of value."

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