[Click eStock] SK Materials Records All-Time High Performance... Operating Profit Surpasses 60 Billion Won for the First Time

Growth Across Specialty Gases and Industrial Gases

[Asia Economy Reporter Minwoo Lee] SK Materials has recorded record-breaking performance. This is interpreted as a result of balanced growth across most sectors, from specialty gases to industrial gases.

On the 29th, Daishin Securities analyzed SK Materials' performance accordingly. The day before, SK Materials announced that its Q3 consolidated sales reached 246.7 billion KRW, with an operating profit of 62.5 billion KRW. Compared to the same period last year, sales increased by 22.1% and operating profit by 11.4%. This is the first time operating profit has surpassed 60 billion KRW.

It is estimated that shipments in the specialty gases sector increased by about 10%. Among the downstream industries, the operating rates of OLED and LCD panels increased, resulting in steady shipments of nitrogen trifluoride (NF3) and monosilane. Tungsten hexafluoride (WF6), which has a high proportion in NAND semiconductors, and dichlorosilane (DCS) also continued their growth trend due to the increase in the number of layers in 3D NAND semiconductors. Specialty gas shipments are expected to remain favorable in Q4 as well. Daishin Securities researcher Soobin Lee predicted, "The timing of LCD withdrawal is also delayed, so the increase in shipments for semiconductors and OLEDs will offset this."

In the etching gas sector, increased volume in Q3 reduced the burden of fixed costs, significantly improving the operating profit margin compared to the previous quarter. Researcher Lee explained, "SK Materials supplies fluoromethane-based gases used for nitride film etching in 3D NAND," adding, "Significant growth is expected next year due to the expansion of 3D NAND production by major customers."

Industrial gases began supply to SK Hynix's M16 fab (integrated semiconductor production process), resulting in sales of 49 billion KRW, a 12% increase from the previous quarter. Growth rate is expected to accelerate further in Q4. Researcher Lee stated, "Next year, the industrial gas related to M16 will be reflected in earnings, and SK Airgas's share of total company sales will expand to 22%. Since SK Airgas's operating profit margin is higher than the company's overall margin, margin improvement is anticipated."

Based on these factors, Daishin Securities forecasts SK Materials to achieve total sales of 950.7 billion KRW and operating profit of 236.4 billion KRW this year. This represents a 23% increase in sales and a 10% increase in operating profit compared to last year. The investment opinion 'Buy' and target price of 300,000 KRW were also maintained. The closing price the previous day was 223,500 KRW.