SK Itecnix shares have surged over 20% in response to the government's push for a domestic production tax credit, akin to the U.S. Inflation Reduction Act (IRA), and expectations of reduced price competition in China's solar industry.
As of 2:19 PM on August 4, SK Itecnix was trading at 57,000 won, up 10,450 won (22.45%) from the previous trading day, according to the Korea Exchange.
The government's announcement the day before regarding the introduction of a domestic production tax credit in its 2026 tax reform plan has stimulated investor sentiment. This tax credit is designed to minimize the impact of U.S. tariffs and encourage domestic investment in industries such as semiconductors, solar energy, secondary batteries, artificial intelligence, robotics, and wind power. The tax credit will be applicable to products produced and sold domestically, with additional incentives for local production facilities under consideration.
Additionally, movements by the Chinese government to improve order in the solar industry have contributed to the rise in related stocks. The State Administration for Market Regulation in China conducted a price compliance guidance for the solar industry for the first time in about seven months, interpreted as a measure to alleviate excessive price competition and normalize supply order, leading to increased expectations for market improvement.
As a result, solar-related stocks such as Tongwei and Xinyi Solar surged in the Chinese stock market the previous day, and polysilicon futures prices also hit their daily limit, reflecting improved investor sentiment across the solar value chain. In South Korea, buying interest has also flowed into renewable energy-related companies, including SK Itecnix.
* This article has been translated by AI.
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