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Sociedad Quimica Y Minera De Chile SA ADR SQM

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Morningstar’s Analysis

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Capital Allocation


Trimming SQM's Fair Value Estimate to $55 on Dilutive Share Issuance to Fund Capacity Expansions

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

On Dec. 23, SQM announced it plans to issue $1.1 billion in class-B equity--roughly 22.4 million shares. This implies an average share issuance price of around $49 per share, which we view as dilutive to current shareholders given that the price is below our fair value estimate.

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Company Profile

Business Description

SQM is a Chilean commodities producer with significant operations in lithium (for electric vehicle batteries), specialty potassium fertilizers, iodine (for X-ray contrast media), and solar salts. The company extracts these materials through its high-quality caliche ore and salt brine deposits.

El Trovador 4285, 6th Floor, Las Condes
Santiago, Chile
T +56 224252000
Sector Basic Materials
Industry Chemicals
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type
Employees 5,598