[Click eStock] SK Innovation Partners with Hyundai Motor, Stock Price Surge Trigger

[Asia Economy Reporter Minji Lee] SK Innovation's battery subsidiary SK On is expected to see valuation improvements following news of building a battery joint venture factory with Hyundai Motor. On the 28th, Noh Woo-ho, a researcher at Meritz Securities, said, "It is considered a positive event for SK On as it allows the promotion of business plans beyond 2025 through collaboration with Hyundai and Kia Motors."

Last Friday, SK On and Hyundai Motor reportedly planned to operate a joint factory in the U.S. with an investment amount of 2.5 trillion KRW, producing 300,000 electric vehicles and 20GW of batteries by 2026. Although there has been no official announcement regarding the investment scale and factory location between the two companies, it is predicted that idle land linked to SK On's Georgia plants 1 and 2 could be utilized. Currently, Hyundai Motor has production plants in Alabama and Georgia, and Kia Motors has a production plant in Georgia. SK On's production sites in the U.S. include Georgia plants No. 1 and 2, and by 2025, the joint ventures BlueOvalSK 43GW with Ford in Tennessee and BlueOvalSK 86GW in Kentucky are expected to operate simultaneously.

With the U.S. IRA legislation requiring localization of battery, cell materials, and electric vehicle production, Hyundai and Kia's mid-to-long-term electric vehicle production target by 2030 is 3 million units. Researcher Noh Woo-ho analyzed, "Currently, since batteries produced by SK On at domestic Seosan and China plants are installed in Ioniq, EV, and Genesis models, the likelihood of cooperation within the U.S. has increased," and "SK On's major material companies also plan to secure production bases in the U.S. targeting 2025-2026."

The announcement of the joint factory is expected to further expand investor sentiment toward SK On. So far, SK On has been undervalued compared to domestic peers due to prolonged pre-IPO processes and concerns over securing investment funds. Researcher Noh said, "After the conclusion of this year's pre-IPO (up to 2 trillion KRW), whether there is a trend of profitability improvement will be a trigger for SK Innovation's stock price rebound next year, and this event increases the visibility of stock price improvement," adding, "It would also be good to expand interest in cathode materials, separators, copper foil, and nickel supply companies that are likely to supply materials to the factory."