SKC and Iljin Materials Rise Together
Performance Improvement Amid Growing Electric Vehicle Demand
[Asia Economy Reporter Eunmo Koo] The stock prices of SKC and Iljin Materials, domestic rivals in the copper foil (Elecfoil) market, are rising together as performance improves with the expansion of electric vehicle demand. Copper foil is a thin copper film that serves as the anode current collector, a key material for electric vehicle batteries.
According to the Korea Exchange on the 4th, the stock price of SKC, a chemical and materials company affiliated with the SK Group, closed at 80,400 KRW, up 8.80% (6,500 KRW) from the previous trading day. The stock price, which had fallen to 70,900 KRW on the 26th of last month, rose 13.4% in six trading days, quickly recovering to the 80,000 KRW level. SKC's surge is attributed to the third-quarter earnings announced the previous day. SKC disclosed that its consolidated operating profit for the third quarter this year was 55.3 billion KRW, a 44% increase compared to the same period last year, and sales also rose 19.7% to 723.7 billion KRW. This is the highest quarterly operating profit since 2015, achieved through balanced growth across most business sectors, including battery copper foil (Elecfoil), chemicals, and semiconductor materials.
In particular, SK Nexilis, SKC's copper foil manufacturing investment company, recorded an operating profit of 15.2 billion KRW and sales of 103.1 billion KRW in the third quarter. This is the first time SK Nexilis has exceeded 100 billion KRW in quarterly sales. This strong performance is due to the full-scale operation of the fourth copper foil plant and increased electric vehicle sales in Europe. Jinmyung Lee, a researcher at Shinhan Financial Investment, explained, "Since July, global electric vehicle sales have turned upward compared to the same period last year, and the high-growth trend in the European electric vehicle market, where major customers are located, continues."
Competitor Iljin Materials has also shown a recovery trend in its stock price since news of the successful localization of ultra-thin copper foil for semiconductors was announced on the 26th of last month. Iljin Materials closed at 44,000 KRW, up 2.09% (900 KRW) the previous day, marking a 6.9% increase since the 26th. The ultra-thin copper foil for semiconductor packages, successfully localized by Iljin Materials, has a thickness of 1.5 micrometers (μm, one-millionth of a meter), making it the thinnest copper foil used in the electronics and IT industries.
The third-quarter performance is also expected to break the recent downward trend in operating profit and turn to growth. According to financial information provider FnGuide, Iljin Materials' third-quarter operating profit is estimated to increase by 25.2% year-on-year to 19.7 billion KRW.
With the policy momentum from decarbonization systems and the Green New Deal, high growth in the electric vehicle market is expected, so copper foil companies are also likely to continue improving their performance based on favorable demand from upstream industries, and their stock prices are expected to maintain an upward trend. Minseok Won, a researcher at Hi Investment & Securities, said, "Through this performance, SKC confirmed the full operation of the fourth copper foil plant, and with the sequential operation of the fifth and sixth plants in 2022, the performance improvement in the copper foil business division will continue," adding, "The stock price will also continue to maintain a solid trend by riding the growth momentum from the expansion of the global electric vehicle market."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
