[Click eStock] "SK Inno, Battery Profitability Slumps... Target Price Down"

Daishin Securities judged on the 7th that SK Innovation's battery division continues to experience poor profitability. Accordingly, it maintained a 'Buy' investment rating but lowered the target price to 180,000 KRW.

Researcher Wi Jeong-won of Daishin Securities stated, "The target price was lowered due to a downward revision of the annual earnings estimate following the possibility of a slowdown in SK On's first-half performance."

Wi explained, "The operating loss in the battery division for the fourth quarter was 18.6 billion KRW, continuing the deficit," and added, "The operating margin was -9.5%, recording a similar profit margin to the previous quarter (-9.3%)."

The difficult business conditions are expected to continue into the first quarter of this year. SK On's first-quarter operating loss is projected to widen to 184.7 billion KRW. Researcher Wi analyzed, "A price decline (QoQ -10%) due to falling metal prices and a negative lagging effect will persist," and "Initial costs are inevitable due to the start of operations at the Hungary Plant 3 in the first quarter and the new China SK OY plant in the second quarter."

He added, "From the second half of the year onward, profitability is expected to gradually improve with battery price stabilization and shipment recovery due to customer inventory depletion."

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