[Click eStock] "From OLED Materials to Secondary Batteries... SK Materials Has It All"

SK Rewutec, SK Showadenco and Other Acquired Subsidiaries Show Sequential Rapid Growth
OLED Emitting Material Sales Also Reflected from Q3

[Asia Economy Reporter Minwoo Lee] SK Materials recorded earnings that exceeded expectations in the second quarter of this year. As various material businesses such as photoresists and OLED light-emitting materials diversify, and with the official entry into the secondary battery business, it is analyzed that the company will emerge as the top preferred stock in the semiconductor supply chain.

On the 21st, Samsung Securities maintained a 'Buy' rating on SK Materials and raised the target price by 17.9% from 390,000 KRW to 460,000 KRW. The closing price the previous day was 400,000 KRW.

First, the strong performance in the second quarter of this year is noteworthy. On a consolidated basis, sales reached 280.1 billion KRW and operating profit was 68.1 billion KRW, increasing by 23.13% and 20.33% respectively compared to the same period last year. The operating profit exceeded market consensus by 1.44%. This is considered a solid achievement despite reflecting 2 billion KRW in costs related to the acquisition of J&C. Researcher Jongwook Lee of Samsung Securities explained, "This result reflects strong performance in specialty gases such as tungsten hexafluoride (WF6) and subsidiaries SK Showa Denko (etching gases) and SK Renewtech (CO2). Although SK Airplus (industrial gases) and SK Trichem (precursors) underperformed, there is no problem in achieving the annual target."

The total operating profit for this year is projected to increase by 21% from last year to 284 billion KRW. It is analyzed that through mergers and acquisitions (M&A), the proportion of sales from new subsidiaries will increase from 18% in 2017 to 46%, and the profit ratio will rise from 14% to 45%. The researcher added, "From the third quarter, price increases for nitrogen trifluoride (NF3) are expected, and sales of photoresists and OLED light-emitting materials will begin to be reflected. Considering the high corporate valuations of photoresist companies and the growth expectations for WOLED TVs, these will serve as a foundation for additional premium valuation in the future."

The official entry into the secondary battery business is also a positive factor. The company appears to be starting to diversify its market. The researcher emphasized, "The acquired business units such as SK Renewtech and SK Showa Denko are rapidly growing in different sequences, and SK Materials' growth is not over yet."

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