Encouraged by its expanding battery cells business, analysts here are raising their estimates of the value of SK Innovation amid a series of new orders and investment plans by the firm.

SK Innovation, the owner of South Korea’s biggest refiner, SK Energy, is expected to see its corporate value in 2022 increase by 14 trillion won from the current level, according analyst Lee Do-yeon of Korea Investment and Securities Co. Added to the current value, the figure in four years could reach some 33 trillion won, Lee said.

“Considering the firm creates at least 4 trillion won in annual earnings before interest, taxes, depreciation and amortization, the recent battery investment plans sound reasonable.”

SK Innovation plans to expand its existing 4.7 Gigawatt-hour battery capacity to 55 GWh, more than 10 times the current capacity. by 2022. The company has already secured contracts for the expanded capacity.

Most recently, German automaker Volkswagen Group selected SK Innovation as a supplier of battery cells for electric vehicles last week. With Volkswagen planning to unveil 50 types of electric cars by 2025, demands for the battery cells business soared.

SK Innovation is currently establishing its plants in Hungary and Changzhou, China. With the Volkswagen Group deal, the firm is also looking for candidates to build new plants around the US and Europe.

The scale of the battery market is expected to rise rapidly, with global market demand expected to exceed 191 GWh this year and over 700 GWh by 2025, according to industry sources.

By Lee So-jeong (xojeong2@heraldcorp.com)