 |
An SK IE Technology employee inspects a separator. (Photo = SK IE Technology) |
[Alpha Biz= Kim Jisun] Shinhan Investment Securities analyzed today that SK IE Technology is expected to turn profitable next year but lacks short-term momentum. As a result, it has lowered the target price from 42,000 KRW to 23,000 KRW while maintaining a ‘Buy’ rating. The previous trading day's closing price for SK IE Technology was 22,900 KRW.
In Q4 of last year, SK IE Technology recorded sales of 59.3 billion KRW, a 17% increase from the previous quarter, with an operating loss of 91.9 billion KRW. This was below market expectations of 56.9 billion KRW in sales and an 86.8 billion KRW operating loss.
Shinhan Investment attributed the operating loss to high fixed costs due to a low operating rate of around 20% and one-time expenses of 30 billion KRW, including inventory valuation losses. However, inventory levels decreased by 16% from the previous quarter to 140.1 billion KRW, reflecting a positive inventory reduction trend.
The firm expects limited improvements in operating rates in the first half due to weak demand and inventory depletion efforts. However, profitability is expected to gradually improve in the second half with the recovery of captive (in-house) demand and the start of shipments to new customers.
Shinhan Investment also noted that the slowdown in EV demand and policy uncertainties stemming from Trump-related risks have led to a downward revision of expectations for battery manufacturers. However, they believe that most of the negative factors have already been priced in and that the worst phase has passed.
Given last year’s significant losses due to weaker captive demand, securing new customers is crucial for this year. Expanding non-captive sales through diversification of IT battery customers and new supply contracts is expected to be a key growth driver.
An analyst stated, “Despite potential recovery in the latter half of the year, considering the annual low operating rate (46%) and high reliance on captive demand, we expect profitability to be achieved next year, with no strong short-term momentum.”
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
