[Click eStock] "SKC, Increasing Profit Trend in Dongbak Business... Strong Performance Expected"

[Asia Economy Reporter Myunghwan Lee] Kiwoom Securities announced on the 26th that it maintains a buy rating and a target price of 237,000 KRW for SKC. This is due to the expectation that the company's copper foil business division will continue its profit growth trend.

Kiwoom Securities expects SKC to sustain solid performance this year and next compared to other copper foil companies. This year, the operation of the No.5 plant in Jeongeup, Jeonbuk, which was expanded last year, will be reflected, and from the second quarter, the expanded capacity of the No.6 plant will be fully reflected in the results. They also forecast additional profitability improvements through strengthened marketing to key customers and scale expansion.

They analyzed that the proportion of exports to the United States has also significantly increased. SKC's US export share, which was only 3-4%, rose to 20% last month. This is because the conservative expansion by Japanese copper foil companies has led to increased exports to Panasonic, which supplies cylindrical batteries to Tesla.

Exports to China, which were only 30% in early last year, have also expanded to 50% this year. This is due to increased supply to Chinese LFP (Lithium Iron Phosphate) battery companies such as CATL and BYD. LFP batteries have lower energy density, so the amount of copper foil input is about 5-10% higher than that of high-nickel batteries.

Kiwoom Securities forecasts that when the Malaysian copper foil plant begins sequential operations by next year, copper foil production capacity will increase to 102,000 tons, making SKC the world's number one. Additional profitability improvements are expected due to fixed cost reductions such as low electricity costs using nearby hydropower at the Malaysian plant, investment incentives including tax benefits, and low labor costs.

Researcher Dongwook Lee of Kiwoom Securities analyzed, "With the easing of supply shortages of automotive semiconductors and parts, sales expansion to European OEMs (Original Equipment Manufacturers) is expected," adding, "This will be positive for next year's performance."

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