KOSPIBatteries361610

SK ie technology

₩17,570▲ 8.26%2026-10-02 close

Market Cap

₩1.4T

Turnover

₩11.1B

Volume

640,000 shares

Shares out.

81.8M

PER

—

PBR

1.0×

EPS

-₩19,463

Dividend Yield

0.00%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩0 per share · Prices as of the 2026-10-02 close

Report overview

Loss-Making Separator Arm Enters Parent Merger Process

With losses prolonged by weak EV separator demand and low utilization, the August 2026 board approval of an absorption merger into SK Innovation has shifted the key variables for shareholders from quarterly earnings to the merger process and appraisal rights.

1
SK Innovation and SKIET each approved the absorption merger at board meetings on August 25, 2026, with a merger ratio of 1 to 0.1174540 and a merger date of January 1, 2027; SKIET will be dissolved and delisted.
2
Second-quarter 2026 revenue was 39.5 billion won with a 63.4 billion won operating loss, while the net loss attributable to owners reached 1.328 trillion won; external research attributes this to the one-time recognition of a China subsidiary disposal loss and asset impairments.
3
A production footprint overhaul is underway: the Changzhou entity in China was sold for about 88.8 billion won, the Jeungpyeong plant is scheduled to halt commercial output on November 30, and production is being consolidated in Poland.
4
Per SNE Research, Chinese separator makers held 89.6% of the global market in the first quarter of 2026 while the Korean share fell to 3.7%, leaving the competitive backdrop unfavorable.
5
If SKIET shareholders' appraisal rights claims exceed 350 billion won, the merger contract may be terminated or its terms changed, making the November to December procedural steps the single biggest item to monitor.

Business structure

SKIET was spun off from SK Innovation's materials business in April 2019 and listed on the KOSPI in May 2021, expanding capacity and overseas operations around lithium-ion battery separators (LiBS) as its core product.

A separator is a thin film that prevents direct contact between cathode and anode, blocking short circuits and fires while allowing lithium ions to pass, and it is one of the four key battery materials governing safety, power and life.

The revenue mix is effectively a single separator business, and press reporting indicates that roughly 60% of sales come from transactions with its largest customer, SK On.

Given this customer concentration, SK On's EV and energy storage system (ESS) battery shipments translate almost directly into the company's utilization rate.

The production footprint is being reshaped substantially: on May 27, 2026 the company disclosed the sale of its entire stake in the Changzhou plant operating entity to Chinese separator maker Semcorp for about 88.8 billion won (400 million yuan), and on the same day announced that all lines at the Jeungpyeong plant in North Chungcheong Province would stop commercial production from November 30.

Jeungpyeong, in operation since 2010 and more than 15 years old, is not being closed outright; the company is reviewing its use as a research and development base for next-generation separator materials and pilot test-bed functions.

Future output will be consolidated at the Silesia complex in Poland, where Plant 1 is running, Plant 2 is slated to start at year-end and Plants 3 and 4 are under construction, taking annual capacity to 1.54 billion square meters when all are complete, equivalent to roughly 1.75 million EVs.

Competitively, large Chinese players such as Semcorp, Senior and Sinoma drive volume and pricing while Japanese suppliers defend higher-value niches, and domestically WCP and LG Chem, which is focusing on coated separators, compete in the same space.

The company and its parent present local North American and European supply chains plus ESS-oriented and high-heat-resistance products as their differentiation, rather than head-on volume competition in commodity grades.

Earnings trend

Quarterly revenue · Operating profit

₩82.7B-₩53.7B25Q2₩79.1B-₩47.2B25Q3₩41.8B-₩75.8B25Q4₩35.9B-₩73.2B26Q1₩39.5B-₩63.4B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩585.8B-₩52.3B2022₩649.6B₩32B2023₩217.9B-₩291B2024₩261.9B-₩246.4B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩82.7B	-₩53.7B	−64.9%
2025Q3	₩79.1B	-₩47.2B	−59.7%
2025Q4	₩41.8B	-₩75.8B	−181.2%
2026Q1	₩35.9B	-₩73.2B	−204.1%
2026Q2	₩39.5B	-₩63.4B	−160.5%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩585.8B	-₩52.3B	-₩29.7B	−8.9%	−1.4%	60.8%
2023	₩649.6B	₩32B	₩82.2B	4.9%	3.4%	69.3%
2024	₩217.9B	-₩291B	-₩246.6B	−133.6%	−10.6%	78.5%
2025	₩261.9B	-₩246.4B	-₩211.4B	−94.1%	−8.1%	68.8%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

Confirmed results show a sharp break after a 2023 peak: 2023 revenue was 649.6 billion won with operating profit of 32.0 billion won (4.9% operating margin) and net profit of 82.2 billion won, but 2024 revenue collapsed to 217.9 billion won with an operating loss of 291.0 billion won (-133.6% margin) and a net loss of 246.6 billion won.

In 2025 revenue recovered modestly to 261.9 billion won, yet the operating loss of 246.4 billion won (-94.1% margin) and net loss of 211.4 billion won still nearly matched revenue.

Given that 2022 also showed a 52.3 billion won operating loss on 585.8 billion won of revenue, profitable 2023 now looks like the exception rather than the norm.

The quarterly path is even clearer: revenue fell from 82.7 billion won in the second quarter of 2025 to 79.1 billion, 41.8 billion and 35.9 billion won through the first quarter of 2026 before edging up to 39.5 billion won in the second quarter of 2026, while operating losses over the same quarters ran at 53.7 billion, 47.2 billion, 75.8 billion, 73.2 billion and 63.4 billion won, each exceeding sales.

In a separator business dominated by fixed costs, persistently low utilization translates revenue declines directly into margin damage, and that mechanism is fully visible in these figures.

Net loss attributable to owners widened from 130.7 billion won in the fourth quarter of 2025 and 81.8 billion won in the first quarter of 2026 to 1,327.6 billion won in the second quarter of 2026; SK Securities explained in an August 2026 report that this reflected roughly 600 billion won of disposal losses on the Chinese subsidiary plus about 860 billion won of tangible asset impairments, and noted the debt-to-equity ratio rose from 68% in the first quarter to 152% in the second.

Operating cash flow swung from an inflow of 125.3 billion won in 2023 to outflows of 87.2 billion won in 2024 and 33.4 billion won in 2025, and the end-2025 balance sheet of 2,601.4 billion won in equity against 1,790.4 billion won in liabilities (68.8% debt-to-equity) changed materially once the second-quarter impairments were recognized.

On the volume side, SK Securities estimated second-quarter 2026 shipments at 59 million square meters, up 10% quarter on quarter, citing easing customer inventory adjustments and pre-emptive buying ahead of the production base transition.

In short, these are the numbers of a period in which shrinking revenue, fixed-cost burdens and one-off restructuring accounting losses overlapped.

Industry analysis

End demand itself has not shrunk: SNE Research data show separator loadings in EVs reached 5.552 billion square meters in January to April 2026, up 17.7% year on year, while the ex-China market grew 38.4% to 2.008 billion square meters. The issue is who captures that growth.

In the same survey, Chinese suppliers held 89.6% of the global market in the first quarter of 2026, up 3.0 percentage points from 86.6% a year earlier, while the Japanese share fell from 8.3% to 6.7% and the Korean share from 5.1% to 3.7%.

SKIET's loadings declined 13% over the period, marking it as one of the non-Chinese suppliers most exposed to the demand slowdown.

SNE Research notes that as capacity races in China intensify pricing pressure on commodity separators, leading players are shifting competition toward higher-value products such as ceramic-coated, high-heat-resistance and ultra-thin films.

In cycle terms, the EV separator segment remains in an oversupply and price-decline phase, while the new demand axis is ESS: SNE Research put first-half 2026 ESS lithium-ion battery shipments at 461.3GWh, up 71% year on year, with grid storage accounting for 75.2%.

Domestic peers are moving in the same direction, as LG Chem sold the base-film separator business at its Hungarian joint venture to concentrate on coated separators, while WCP is reported to have secured ESS separator supply to SK On.

The industry consensus is therefore that competitiveness will hinge on capturing non-China supply chain demand in North America and Europe and on high-value technology, rather than on volume competition.

Outlook

The dominant variable is a governance event rather than earnings: on August 25, 2026 SK Innovation and SKIET each approved an absorption merger under which each SKIET common share receives 0.1174540 SK Innovation common shares, with a merger date of January 1, 2027 and listing of the new shares on January 18, 2027.

Surviving entity SK Innovation is using a small-scale merger procedure while SKIET follows the ordinary merger route, and SKIET will be dissolved and delisted once the merger completes.

The merger price and ratio were set using the reference market price method prescribed by the Financial Investment Services and Capital Markets Act enforcement decree, so the actual exchange value will move with SK Innovation's share price.

On an August 26, 2026 conference call, SK Innovation said it would pursue a near-term EBITDA turnaround in the separator business through cost reductions and expanded ESS separator output, citing lower duplicate and financing costs and cheaper interest expense on the parent's credit standing as expected benefits.

Operationally, the calendar includes the November 30 halt of commercial production at Jeungpyeong, the year-end start-up of Poland Plant 2 and ongoing construction of Plants 3 and 4, which are reported to be built as ESS separator lines.

However, press reporting notes that 2.9 trillion won of the 3 trillion won earmarked for Poland has already been spent, and that utilization could fall again once new plants start if sales volumes stay at current levels.

On policy, the "prohibited foreign entity" rules under the US Advanced Manufacturing Production Credit raise non-China sourcing thresholds from 60% in 2026 to 85% or more from 2030, which is cited as supportive for non-Chinese separator demand.

For near-term earnings, SK Securities said in an August 2026 report that it expects a third-quarter operating loss of 62.2 billion won, while IBK Investment & Securities presented a neutral rating with a 20,000 won target price in a May 2026 report.

Valuation

PER

—

PBR

1.0×

ROE

-87.2%

EPS

-₩19,463

BPS

₩15,747

Dividend per share

₩0

Conventional earnings multiples do not describe this stock's valuation, because the sum of the last four quarters is a large net loss, so profit-based multiples cannot be computed and are not shown on the data card. Net-asset-based measures also need care, as they vary widely by basis.

Exchange-published figures reflect the end-2025 financial statements, but because the China disposal loss and tangible asset impairments were recognized together in the second quarter of 2026 and sharply reduced equity, internally calculated values using the latest half-year financials show a far smaller discount to net assets.

Directionally, the path runs from profit in 2023 to consecutive losses in 2024 and 2025 and a very large net loss in the first half of 2026, which has effectively removed any earnings-based valuation anchor.

The more important structural change is the merger: with the ratio fixed at 1 to 0.1174540, this share's value is now discussed between two reference points, namely the exchange value implied by SK Innovation's share price multiplied by that ratio, and the appraisal rights mechanism.

On confirmed financials there is no dividend payment record, so dividend-yield comparisons do not apply. Interpretation should therefore combine the real-time figures on the data card with the progress of the merger procedure.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Parent absorption cushions funding and balance sheet risk

In its securities registration statement, SK Innovation said SKIET faces growing constraints in funding and cash generation as a standalone entity, presenting this as the rationale for the merger.

The company expects post-merger financial stability to improve through the elimination of duplicate listed-company costs and lower interest expense based on SK Innovation's stronger credit standing.

On the August 26, 2026 conference call, management said it would pursue a near-term EBITDA turnaround in the separator business via cost cuts and expanded ESS separator output. The bull case rests on the possibility that the recurring borrowing burden of standalone operation changes structurally.

Consolidation leaves room to improve fixed costs and utilization

The company is selling the Changzhou entity in China for about 88.8 billion won and halting commercial production at Jeungpyeong on November 30, clearing out aged equipment and underused assets.

With industry estimates putting average utilization in the second quarter of 2026 in the low 20% range, concentrating output on Poland's newer lines leaves room to lower unit fixed costs. Press reporting has cited expectations that utilization at Poland Plant 1 could exceed 80% once consolidation is complete.

On volumes, SK Securities estimated second-quarter 2026 shipments at 59 million square meters, up 10% from the prior quarter.

Surging ESS demand and non-China supply chain rules

SNE Research put first-half 2026 ESS lithium-ion battery shipments at 461.3GWh, up 71% year on year, with grid storage making up 75.2% of the total. Poland Plants 3 and 4 are reported to be built as ESS separator lines, and the parent explicitly cited ESS separator expansion among the merger's expected benefits.

The "prohibited foreign entity" rules under the US Advanced Manufacturing Production Credit raise required non-China sourcing shares from 60% in 2026 to 85% or more from 2030, which is discussed as supportive for non-Chinese separator demand.

SNE Research likewise expects future competitiveness to depend on ESS product capability, local North American and European supply chains, and reduced China dependence.

Bear factors

Structural oversupply and Chinese dominance

SNE Research data show Chinese separator makers' global share rising to 89.6% in the first quarter of 2026 while the Korean share fell to 3.7%. Over the same period SKIET's separator loadings fell 13%, marking it as affected by the slowdown even among non-Chinese suppliers.

As long as capacity races in China keep pressuring commodity product prices, volume recovery alone is unlikely to normalize margins. Press reporting that EV separator sales volume for January to May 2026 fell about 13% to 180 million square meters from 195 million a year earlier is consistent with this trend.

Large impairments abruptly changed the balance sheet

On confirmed figures, the second-quarter 2026 net loss attributable to owners was 1,327.6 billion won, up sharply from 81.8 billion won in the prior quarter.

SK Securities said in an August 2026 report that this reflected roughly 600 billion won of disposal losses on the Chinese subsidiary and about 860 billion won of tangible asset impairments, with the debt-to-equity ratio rising from 68% in the first quarter to 152% in the second.

In 2025 the company had already booked 100.1 billion won of impairments on tangible and other assets as non-operating expense, showing a repeated pattern of write-downs.

Operating cash flow also stayed negative, with outflows of 87.2 billion won in 2024 and 33.4 billion won in 2025, indicating a period without self-generated cash.

Merger process uncertainty and delisting

The securities registration statement states that if the amount payable for SKIET shareholders' appraisal rights exceeds 350 billion won, the parties may terminate the merger contract or change its terms by written agreement.

The surviving company's procedure is also a variable: if holders of 20% or more of outstanding shares notify opposition, SK Innovation cannot proceed via the small-scale merger route, and if converted to an ordinary merger, appraisal payments above 600 billion won would likewise allow termination or amendment.

If the merger proceeds as scheduled, SKIET will be dissolved and delisted, so trading in this security ends and holders become SK Innovation shareholders. Observers also note that even if separator conditions improve, the results will be blended into SK Innovation's consolidated performance.

Risk factors

Policy and regulation

The parent company says the recovery in North American EV demand has been slower than expected following changes to US EV subsidy policy.

IBK Investment & Securities judged in a May 2026 report that uncertainty was widening due to lower battery shipments at key customers after the removal of US EV subsidies and rising share of Chinese battery makers in Europe.

Conversely, non-China sourcing requirements in US tax credits are cited as a supportive factor, though the size of the effect depends on detailed criteria and timing. Policy simultaneously moves demand, pricing and site selection in this industry.

Customer concentration

Press reporting indicates roughly 60% of revenue comes from transactions with SK On, so changes in one customer's shipment plans feed straight through to utilization and sales.

The company is counting on SK On's ESS expansion, but reporting also notes that SK On has yet to achieve major traction in the North American ESS market. With Poland Plants 3 and 4 being converted to ESS lines, securing new orders becomes the key to utilization. Without visible customer diversification, newly added assets could again become a low-utilization burden.

Liquidity and funding needs

Edaily MarketIn reported in March 2026 that consolidated total borrowings stood at 1,691.4 billion won at end-2025, with about 591.6 billion won of short-term debt due within a year.

The board is reported to have approved 200 billion won of new borrowing on May 7, 2026 to repay debt, and proceeds from the China entity sale were also seen as supporting liquidity.

Given that confirmed operating cash flow was negative in both 2024 and 2025, a funding structure reliant on borrowing and asset sales remains vulnerable to rate and industry swings. Separately, appraisal rights payments would create their own funding burden depending on how the merger process unfolds.

What to watch next

September 9 to 23, 2026
This is the window for SK Innovation shareholders to notify opposition to the small-scale merger. If holders of 20% or more of outstanding shares object, the small-scale route fails and the deal could convert to an ordinary merger, making appraisal claims by the surviving company's shareholders a new variable.
Late October to early November 2026
Third-quarter 2026 results will show shipment volumes, fixed-cost burden and costs related to the Jeungpyeong shutdown. SK Securities said in an August 2026 report that it expects a 62.2 billion won operating loss for the quarter, providing a reference point against the reported figures.
November 9 to 24, 2026
SKIET shareholders can notify opposition from November 9 to 23, followed by the extraordinary general meeting to approve the merger agreement on November 24. Approval at the meeting and the scale of opposition form the first gate for the merger's completion.
November 24 to December 14, 2026
This is the appraisal rights exercise period. The securities registration statement allows the parties to terminate or amend the merger contract if claims exceed 350 billion won, so disclosure of the exercised amount is the single biggest procedural checkpoint.
November 30, 2026 to January 18, 2027
The sequence includes the scheduled halt of commercial production at Jeungpyeong on November 30, the year-end start-up of Poland Plant 2, the January 1, 2027 merger date and the January 18, 2027 listing of merger shares. Key items are how consolidation feeds into actual utilization and costs, and whether delisting and share allotment proceed on schedule.

Overall view

SKIET posted operating losses of 291.0 billion won in 2024 and 246.4 billion won in 2025 as weak EV separator demand, aggressive Chinese volume and price competition and low utilization overlapped, and operating losses exceeding quarterly revenue continued into the first half of 2026.

In the second quarter of 2026, the disposal of the Chinese entity and asset impairments were recognized together, driving the net loss attributable to owners to 1,327.6 billion won, effectively the accounting bill for the ongoing footprint overhaul.

The company is shifting to a Poland-centered system through the sale of the Changzhou entity and the halt of Jeungpyeong production, with Poland Plants 3 and 4 reported to be built as ESS separator lines.

Industry-wide, EV separator loadings are still growing and ESS demand is surging, yet Chinese suppliers are absorbing most of that growth while the Korean share has slipped to the 3% range.

Above all, the August 25, 2026 board approval of the absorption merger into SK Innovation has changed the nature of this security, with a merger ratio of 1 to 0.1174540, a January 1, 2027 merger date and January 18, 2027 listing of new shares, after which SKIET is dissolved and delisted.

Accordingly, the items to monitor shift from quarterly earnings to procedural events: the November 24 shareholder meeting, the appraisal rights exercise from November 24 to December 14 against the 350 billion won threshold, and the outcome of the surviving company's opposition notice window from September 9 to 23.

Both the bull case (balance sheet cushioning under the parent, production consolidation, ESS and non-China supply chains) and the bear case (structural oversupply, sharply reduced equity, procedural uncertainty and delisting) are simultaneously valid, and this material is for information purposes only and contains no buy or sell recommendation.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

Show 18 more articles and sources

Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.