[Click eStock] SK IE Technology Expected to Return to Profit in Q3

Yuanta Securities initiated coverage on SK IE Technology on the 11th with a 'Buy' rating and a target price of 107,000 KRW. They analyzed that the U.S. Inflation Reduction Act (IRA) will accelerate customer diversification for domestic separator companies, identifying SK IE Technology as a representative separator company to watch at this time.

Researcher Anna Lee from Yuanta Securities stated, "We expect first-quarter sales to decrease by 15% quarter-on-quarter to 150.8 billion KRW, with an operating loss continuing at -9 billion KRW. This is due to the seasonal nature of separators, where the first quarter is typically a low season, and the low operating rate of SK On, the main customer." She added, "The operating rate of the Poland plant in the first quarter is expected to be around 70%, so losses are likely to continue through the second quarter, but a turnaround to profitability is anticipated in the third quarter through cost reductions."

With separators included in the detailed provisions of the U.S. IRA, three domestic companies, excluding the Chinese supply chain, are now responding to demand within the U.S. Since separators account for the second-highest proportion of cell production costs after cathode materials, customer diversification among separator companies is expected to accelerate, similar to recent moves by cathode material companies. The researcher noted, "In the case of SK IE Technology, the Poland Plant 1 operating rate remains in the 70% range due to the low operating rate of SK On, its main customer, and the mass production of Poland Plant 2, which was scheduled to start, is also delayed. However, a turnaround to profitability in the third quarter through cost reductions is expected, and if customer diversification accelerates, expansion will continue from the previously planned Poland Plants 2 to 4 to the U.S. plant."

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