[Click eStock] "SKC, Cost Improvement Expected with Full-Scale Production in Malaysia"

IBK Investment & Securities anticipated on the 8th that SKC will gradually improve its cost structure starting this year. This is because it plans to fully operate copper foil facilities overseas, such as in Malaysia, where electricity costs are relatively low. Accordingly, it maintained its investment opinion as 'Buy' and the target price at 136,000 KRW.

Lee Dong-wook, a researcher at IBK Investment & Securities, stated, "We plan to commercialize copper foil plants in Malaysia by the end of this year and in Poland next year," adding, "Since the overseas share in Malaysia and Poland, where electricity costs are cheaper compared to domestic rates, is expected to account for two-thirds of total production capacity, an overall cost improvement is anticipated."

In particular, the Malaysia plant is expected to have high profitability due to electricity costs being 50-60% cheaper than in Korea. Poland is expected to fully comply with RE100 due to customer accessibility and ease of securing large-scale renewable energy.

Meanwhile, SKC is planning supply contracts with European battery companies other than Northvolt. It is also strengthening marketing toward OEM companies in the US and Europe. The researcher predicted, "Considering recent moves by OEM companies to strengthen their value chains, additional orders are expected," and added, "Although a one-year contract was signed with the largest customer this year, further negotiations for mid- to long-term contracts will be conducted in the second half of this year."

On the other hand, SKC has entered the semiconductor glass substrate business, which has high growth potential. It plans to commercially operate a 12,000㎡ glass substrate line in the first half of next year.

The researcher said, "If normal yield is achieved, the company's glass substrate sales are expected to reach about 350 billion KRW (in 2025), and profitability is expected to exceed an EBITDA margin of 50%." He added, "To strengthen the semiconductor packaging business, we are reviewing multiple M&A cases as well as ISC."