SK Materials Dreaming of Becoming a Comprehensive Materials Company, Stock Price Also Transformed Drastically

[Asia Economy Reporter Eunmo Koo] SK Materials has recently been pursuing portfolio diversification, transforming from a semiconductor materials company into a comprehensive materials company, and its stock price has shown a steep upward trend.

According to the Korea Exchange on the 24th, SK Materials' stock price closed at 333,500 KRW, up 8.53% (26,200 KRW) from the previous trading day. Notably, it reached an intraday high of 371,500 KRW, setting a record high, and rose 28.4% this month alone, outperforming the KOSDAQ return of 4.2% during the same period. The market capitalization ranking in the KOSDAQ market also jumped from 11th place (2.7323 trillion KRW) at the end of last month to 6th place (3.5176 trillion KRW) in about three weeks.

The surge the previous day was influenced by news of investment participation in a U.S. battery materials company. SK Materials recently invested 17 million USD (approximately 18.9 billion KRW) in Group14 Technologies, a developer of carbon-silicon composite materials. Group14 is developing battery anode materials that use silicon instead of traditional graphite. Using silicon as an anode material improves energy density compared to carbon and also enhances charging speed.

Kim Kyung-min, a researcher at Hana Financial Investment, said, “This investment event can raise the price-to-earnings ratio (PER) valuation,” and predicted, “SK Materials’ entry into the battery materials business will not be limited to participation in Group14’s venture investment funding.”

Recently, SK Materials has been attracting investor attention by diversifying its portfolio and evolving from a semiconductor materials company into a comprehensive materials company. Earlier, on the 25th of last month, it announced the establishment of a joint venture, ‘SK JNC,’ with the Japanese OLED (organic light-emitting diode) materials company JNC. This is seen as a result of aligned interests between SK Materials, which has secured domestic materials distribution channels, and JNC, which possesses OLED materials technology, especially related to blue devices.

In addition, SK Materials continues to grow through mergers and acquisitions (M&A) of companies such as SK Airgas, SK Trichem, SK Showa Denko, Hanyou Chemical, and SK Performance. Do Hyun-woo, a researcher at NH Investment & Securities, forecasted, “With SK Hynix’s M16 operation, SK Airgas’s sales expansion is possible, and SK Trichem will see business expansion next year as some memory semiconductor insulating materials change to hydrofluoric acid (HF) based types, among other developments in existing joint ventures.”

Not only future expectations but also immediate performance is expected to be supported by improvements in memory supply and demand. Recently, memory supply and demand have improved due to increased non-face-to-face demand, with PC sales reaching the highest level in the past 10 years. According to financial information company FnGuide, SK Materials’ sales next year are estimated to grow 17.0% to 1.1034 trillion KRW compared to this year. Operating profit is also expected to increase by 22.4% to 290.5 billion KRW during the same period. For the fourth quarter of this year alone, operating profit is expected to rise 32.8% year-on-year to 65.2 billion KRW.

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