[Click eStock] SKC 'Excessive Undervaluation' Target Price Raised

[Asia Economy Reporter Hwang Junho] Kiwoom Securities raised the target price to 300,000 KRW on the 22nd, stating that SKC's copper foil production capacity expansion and technological capabilities are undervalued in the stock price.

SKC is building a copper foil plant in Poland following Malaysia. By investing approximately 900 billion KRW, it will secure a production capacity of 50,000 tons by 2024. Furthermore, by 2025, it plans to expand the total copper foil production capacity in the European region to 100,000 tons, which corresponds to 40% of the company's planned total production capacity.

This is a measure to respond to the expansion of battery production capacity in the European region. According to P3, Europe's battery production capacity, which was only 20 GWh in 2019, is expected to increase 22 times to 431 GWh by 2025 and 48 times to 968 GWh by 2030 due to new expansions by domestic, Chinese, European, and American companies.

Assuming the use of 8μm thick copper foil, the demand for copper foil, which was 18,000 tons last year, is expected to increase to 390,000 tons by 2025 and 870,000 tons by 2030. Considering technological capabilities, additional orders from European battery manufacturers for the company are anticipated.

Lee Dong-wook, a researcher at Kiwoom Securities, said, "Since the payback period for copper foil investment is less than four years, the company plans to utilize debt and appears to be reviewing various measures to maintain appropriate financial stability." He added, "Considering the copper foil production capacity of 250,000 tons in 2025, SKC's copper foil value alone is estimated between 9.3 trillion KRW and 12.3 trillion KRW, indicating that it is currently excessively undervalued compared to competitors."