[Click eStock] "SK IE Technology, Positive Impact from IRA"

On the 10th, Kiwoom Securities analyzed that SK IE Technology is likely to benefit significantly from the expansion of the US IRA (Inflation Reduction Act) coverage. They maintained a 'Buy' rating and a target price of 102,000 KRW.

Junsoo Kwon, a researcher at Kiwoom Securities, stated, "Following the announcement of the Foreign Entities of Concern (FEOC) guidance by the US Department of Energy in December last year, battery components such as separators must be produced in the North American region to qualify for IRA subsidies." He added, "Especially for separator and electrolyte materials, which have traditionally used many low-cost Chinese products, this presents a significant opportunity for Korean and Japanese separator companies." According to the IRA guidelines announced at that time, separators and electrolytes were included in the list of products eligible for the Advanced Manufacturing Production Credit (AMPC). Researcher Kwon also noted, "SK IE Technology is considering North American investments with a goal of operating until 2028, so the benefit intensity is expected to be substantial."

For the fourth quarter of 2023, sales are expected to reach 191.7 billion KRW, with an operating profit of 9.1 billion KRW. Compared to the same period in 2022, sales are projected to increase by 8%, and operating profit is expected to turn positive. Researcher Kwon said, "Although there are growing concerns about weakening front-end demand and year-end inventory adjustments, minimum volumes are guaranteed contractually with customers, so 2023 sales are expected to meet market expectations." He forecasted annual sales of 994.1 billion KRW and operating profit of 82.2 billion KRW for this year. Kwon added, "We plan to secure performance visibility through expanding binding contracts and strategic responses at the time of commercial operation," and noted, "The momentum for customer diversification and supply contract expansion due to FEOC remains valid."