[Click eStock] SK IE Technology, Turned Profitable 'Target Price Up'

[Asia Economy Reporter Lee Seon-ae] Kiwoom Securities announced on the 7th that it maintains a buy rating on SK IE Technology and raises the target price from 81,000 KRW to 104,000 KRW. This is due to expected performance improvements such as turning a profit in the second quarter.

SK IE Technology's Q4 results last year showed sales of 177.4 billion KRW, a 13% increase compared to the previous year, while the operating loss was 10.3 billion KRW, continuing the deficit from the previous year. However, the deficit narrowed compared to the previous quarter. The Q1 results for this year are expected to show sales of 169.2 billion KRW, a 26% increase year-on-year, with an operating loss of 4.1 billion KRW continuing. Nevertheless, it is judged that a turnaround to profitability is possible from the second quarter.

Researcher Kwon Junsu of Kiwoom Securities explained, "This year, with the ramp-up (production increase) of new customer factories such as SK On's Georgia Plants 1 and 2 in the U.S. and Plant 2 in Hungary, an increase in shipments is expected, making profitability possible in the second quarter." He added, "As sales in the U.S. from the Poland plant are increasing, further utilization rate improvements are anticipated, and inventory of separators produced at previously high manufacturing costs is being rapidly depleted."

Researcher Kwon said, "With the strengthening of de-China and regional production trends due to recent U.S. Inflation Reduction Act (IRA) and Europe's Raw Materials Act (RMA), there is high demand for SK IE Technology products from regions where production facilities are owned or planned." He forecasted, "Starting with some volumes in the second half of this year, sales to new customers will increase in 2024?2025." Operating profit for this year is estimated at 71.7 billion KRW.