[Click eStock] 'Trading Resumption' SKC... "1Q Earnings Outlook Positive"

Ebest Investment & Securities Report

[Asia Economy Reporter Minji Lee] Ebest Investment & Securities maintained its buy rating and target price of 189,000 KRW for SKC on the 23rd. This is based on the judgment that the company has a well-established long-term growth portfolio centered on copper foil growth through economies of scale, semiconductor, and eco-friendly materials.

In the first quarter, SKC is expected to record sales of 728.8 billion KRW and operating profit of 75.4 billion KRW, representing growth of 14% and 154% year-on-year, respectively. The operating profit is expected to significantly exceed market expectations (67.6 billion KRW). Anna Lee, a researcher at Ebest Investment & Securities, explained, "This is due to the expected strong performance from the chemical division's spread expansion," adding, "In the case of SK Nexilis, operating profit is expected to slightly decrease compared to the previous quarter due to the proactive reflection of selling and administrative expenses such as labor costs caused by the rise in copper prices and capacity expansion."

The company expects positive performance across all business divisions on an annual basis. SK Nexilis's Jeongeup Plant 5 is scheduled to be completed in the second half of this year, and Plant 6 in early next year. Through this, domestic production capacity is expected to expand to 52,000 tons. Once the Malaysian plant with 44,000 tons capacity starts operation, the total production capacity is expected to reach about 100,000 tons. The researcher said, "In semiconductor materials, demand for ceramic parts is expected to increase due to production expansion by major customers this year, and profit expansion is anticipated from the operation of the new CMP pad plant," adding, "The chemical business division is also expected to see profit growth due to steady global consumer goods demand and spread expansion."

SKC is scheduled to resume trading from today. Previously, the company’s trading was suspended on the 8th due to embezzlement and breach of trust issues involving the former chairman. This trading suspension issue was not subject to a substantive review of listing requirements and was unrelated to the company's fundamentals, so the review was completed quickly. Researcher Anna Lee analyzed, "Although stock price volatility is severe recently due to various noises from battery cell companies, general-purpose line products like copper foil are unrelated to this, so the future stock price trend is positive."

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