Hwang Gyu-won, a researcher at Yuanta Securities, said in a report on February 3, “SK Innovation’s battery business is expected to undergo revaluation due to three fundamental improvements,” and suggested a target stock price of KRW 410,000 won for SK Innovation.

In the report, researcher Hwang explained three reasons for the turn-up of the value of SK Innovation’s battery business as follows: ▲ SK Innovation’s order backlog is expected to expand from KRW 220 trillion last year to more than KRW 360 trillion this year, along with the anticipation of the joint venture with Ford Motors; ▲ SK Innovation’s global EV battery market share can increase from 5.5% in 2021 to 9% by the end of 2022, with the expansion of manufacturing facilities in Yancheng, China, and Georgia, the U.S.; ▲ The operating profit of SK Innovation’s battery business can turn to black from the third and fourth quarters of this year.

Kang Eun-ji, a researcher at Korea Investment & Securities, also said in a report on the same day, “In 2022, the revaluation of SK Innovation’s battery business is an important investment momentum.” “Eventually, the most important factor of SK Innovation’s stock price is the battery business,” she emphasized. “SK Innovation plans to nearly double its battery production capacity this year to 77 GWh, and the target of 220 GWh in 2025 is highly likely to be raised in the near future,” researcher Kang added. She also commented that SK Innovation has already secured a global top-tier level with an order backlog of KRW 220 trillion.

In another report dated February 3, researcher Roh Woo-ho of Meritz Securities said, “SK On, a subsidiary of SK Innovation, is expected to secure technological superiority with the commercialization of its NCM9* and stable shipments due to the establishment the joint venture with Ford Motor.” He also predicted that SK On would start gaining profit in the last quarter of this year, with an expected operating profit of KRW 49.7 billion (profit margin of 2.6%).

(*) NCM9: NCM or NMC is the abbreviation of Nickel, Manganese, Cobalt, which are the three main materials of the battery, and number 9 indicates that this type of battery cell has the proportion of nickel up to nearly 90%.