[Click eStock] SKC Takes Strong Action Against Market Rumors... Using Price Drop as a Buying Opportunity

[Asia Economy Reporter Lee Seon-ae] Meritz Securities advised on the 31st that since SKC issued a denial announcement regarding the merger rumors between SK and SKC, investors should take advantage of the stock price decline caused by market rumors as a buying opportunity. The investment opinion 'Buy' and the target price of 195,000 KRW were maintained.

The previous day's closing price of SKC was 147,500 KRW (down 2.3% compared to the previous trading day). Coincidentally, SKC's stock price dropped about 14% over seven days following the merger announcement of its affiliates (SK and SK Materials). The background of SKC's stock price weakness appears to be (1) market rumors: concerns about the SK㈜-SKC merger, and (2) deteriorating sector investment sentiment: such as LG Energy Solution's GM recall provision. In particular, the stock price plunged about 6% intraday following media reports on the possibility of a merger the previous day.

Both companies denied the merger rumors through simultaneous announcements. Regarding this, analyst Noh Woo-ho of Meritz Securities stated, "Considering that SKC, which declared ESG management, responded strongly to market rumors with strengthened internal governance and made efforts for shareholder-friendly stock price support, this is viewed positively," adding, "The denial announcement of the merger rumors could act as a factor to improve the deteriorated investment sentiment for SKC's stock."

Ahead of SKC's Financial Story in September, expectations for new businesses are expected to rise again. The main anticipated points include (1) secondary battery business: establishing a global No.1 position as a copper foil producer (possibility of additional production bases in Europe and the US), and entry into new materials (anode/cathode materials), (2) integration of semiconductor materials, and (3) concretization of investment fund arrangements.

Analyst Noh emphasized, "Considering SKC's solid profit structure and growth potential based on secondary battery and semiconductor materials, it holds overwhelming investment attractiveness compared to competitors. In particular, the company is expected to firmly establish its status as the global No.1 copper foil producer in the second half of this year," and added, "By 2025, it will secure domestic and overseas production capacity of over 250,000 tons, continuously demonstrating profit strength that surpasses competitors."

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