[IPO Spotlight] The Last Gem in the Battery Sector ‥ SKIET

[Asia Economy Reporter Park So-yeon] SK Innovation's battery separator subsidiary, SK IE Technology (SKIET), is planning to list on the KOSPI market this year. SKIET submitted a preliminary review application to the Korea Exchange in December last year.

SKIET is a specialized subsidiary of SK Innovation focusing on battery separators. It also produces transparent polyimide films used in foldable smartphones. It was established in April 2021 through a physical division of SK Innovation's materials business division. SK Innovation holds 90% of the shares, while Premier Partners, a domestic private equity firm, holds 10%.

SKIET's lithium-ion battery separator production volume was 530 million square meters in 2019 and 870 million square meters in 2020. The company plans to increase production to 1.37 billion square meters by the end of this year. Additionally, through the construction of production lines at plants in Poland and China, SKIET aims to expand production to 1.87 billion square meters by 2023.

Separators, which account for about 15% of battery costs, are considered one of the four major battery materials along with cathode materials, anode materials, and electrolytes. As the electric vehicle battery market grows, demand for separators is also surging. According to industry sources, global separator demand is expected to increase from 4.419 billion square meters last year to 6.91 billion square meters this year, and reach 26.21 billion square meters by 2025.

There are limited companies capable of producing high-quality separators. The so-called 'Tier 1' companies in the separator market include SKIET, Japan's Asahi Kasei, and Toray. In the medium-to-large wet separator market used in electric vehicles, SKIET's market share is about 36%, surpassing Japan's Asahi Kasei (31%) to become the world's number one.

SKIET's sequential biaxial stretching process, developed as the world's first in 2007, is recognized as a differentiated technology compared to competitors. This technology sequentially stretches the separator in horizontal and vertical directions, allowing free adjustment of separator thickness while producing uniform quality. Thanks to this technology, SKIET was the first in the world to develop a 5㎛ thin film product.

In the securities industry, SKIET's corporate value is estimated at about 5 to 6 trillion KRW. SKIET has set operating profit targets for the separator business at 300 billion KRW in 2021 and 800 billion KRW in 2025. In 2021, SKIET's sales were 348.5 billion KRW, and operating profit was 111.2 billion KRW, with an operating margin of 31.9%. Last year's operating profit was recorded at 125.9 billion KRW.