SKC’s shares on Oct. 1 tumbled to a three-week low as the decision dampened hopes for the company’s expansion in the battery business through the JV. The stocks lost up to 2.07% to 165,500 won ($139.4), the lowest since Sept. 10.
The shares already tumbled 15.08% in the previous day when SKC announced its board of directors rejected an investment in the JV with Nexeon and the company was not considering brining in the issue to the board again. The directors were known to have disagreed with the timing of the start of the business.
The decision, however, disappointed investors who thought the company should begin the business as soon as possible to meet growing demand. Many automakers announced plans to use silicon anode materials from 2023. Battery material makers need to start preparing since carmakers procure the materials though long term contracts, analysts said.
“It is hard to understand the board of directors’ decision. Considering the timing of the full-fledged silicon anode markets, it is a time to start preparing,” said a HI Investment & Securities analyst Jung Won-seok.
SK Materials is set to start commercial production of silicon anode materials at the factory in 2022.
Some investors saw a decline in SKC’s stocks excessive, saying its valuation looked relatively lower than other battery materials shares. SKC’s determination remained strong, prompting market talk that the company may further expand copper foil production capacity or increase investment in cathode materials business.
Write to Yun-Sang Ko at kys@hankyung.com Jongwoo Cheon edited this article.