[Click eStock] "SKC Seeks Growth Through Glass Substrate and Anode Material Businesses"

Q3 Earnings Exceed Consensus
Shinyoung Securities Maintains SKC Target Price at 220,000 Won

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] SKC posted third-quarter earnings this year that exceeded market consensus, driven by strong performance in the mobility materials and industry materials sectors. Additionally, the company is exploring growth opportunities through the expansion of its glass substrate and anode material businesses.

According to Shin Young Securities on the 2nd, SKC's third-quarter sales increased by 22.54% year-on-year to 886.8 billion KRW, and operating profit rose 163% over the same period to 145.8 billion KRW. These figures surpassed consensus estimates by 0.65% and 11%, respectively.

The mobility and industry materials sectors showed strong performance. Operating profit in the mobility materials sector reached 23.5 billion KRW, a 25% increase compared to the previous quarter. Despite some sales delays due to semiconductor shortages and shipping delays, sales volume increased as the 5th plant began full-scale operations.

The industry materials sector recorded an operating profit of 31 billion KRW, up 20% during the same period. The expansion of product lines with eco-friendly materials such as eco-labels and biodegradable plastics (PLA) was a key factor. Operating profits in the chemical and semiconductor sectors remained steady at 93.8 billion KRW and 7.6 billion KRW, respectively.

Looking ahead, glass substrates are expected to drive growth. On the 28th of last month, SKC announced the commercialization of its semiconductor glass substrate business. Entering the ultra-high-speed computing business, the company aims to capture 20% of the market by 2025 in terms of sales scale. SKC plans to start with an annual production capacity of 12,000㎡ in 2023 and invest an additional 350 billion KRW by 2025 to increase capacity to 72,000㎡ annually.

Furthermore, by investing in a UK company that possesses next-generation anode material technology, SKC is also expected to expand its anode material business. Ji-yeon Lee, a researcher at Shin Young Securities, commented, “Existing copper foil serves as the anode current collector, so overall synergy effects related to anode materials are anticipated,” adding, “It is positive that the company is seeking growth again through business expansion.”

Accordingly, Shin Young Securities maintained a ‘Buy’ investment rating on SKC with a target price of 220,000 KRW. The closing price on the previous day was 168,000 KRW.

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