[Click eStock] "SK Inno, Need to Keep Distance from Split Discount Rate... Top Pick"

[Asia Economy Reporter Ji Yeon-jin] Meritz Securities announced on the 10th that SK Innovation's electric vehicle battery division is highly valued and recommended it as a top pick.

SK Innovation will approve the physical division of its electric vehicle battery and mining rights at the shareholders' meeting on the 16th of this month and will also resolve the agenda for the payment of in-kind dividends by its subsidiaries.

No Woo-ho, a researcher at Meritz Securities, said, "Similar to the sharp stock price drop following LGES's decision on physical division last year, the cautious investment sentiment toward SK Innovation remains," but added, "At least there is no IPO plan within a year, and from 2022, the possibility of in-kind dividend payments by subsidiaries differentiates SK Innovation with a more shareholder-friendly approach compared to competitors. Also, there is no change in the shareholding ratio in the newly established EV battery corporation in the short term, which suggests that applying a stock price discount rate and maintaining some distance is necessary."

The day before, EcoPro BM, a major customer of SK Innovation, announced a supply contract for cathode materials worth 10 trillion KRW. The contract is for an annual supply of 110,000 tons, which will be procured for SK Innovation's North American production plants (Georgia No.1~2 and Ford JV).

SK Innovation's mid-to-long-term production capacity is estimated to be 200 GW+ by 2025 and 300 GW+ by 2030. There is a high possibility of further upward revision as additional investments in North America and the joint venture with Ford's potential entry into Europe remain open. Researcher No said, "With Volkswagen's MPE platform order to be finalized in the second half of 2021, the company is highly likely to participate with a prismatic form factor," adding, "They plan to secure mass production visibility in 2023 through equipment conversion of existing production lines."

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