Sociedad Química y Minera de Chile S.A (SQM-A.SN) fair value

ACCE thesis

Sociedad Química y Minera makes lithium carbonate and hydroxide, specialty plant nutrition products (potassium nitrate, iodine), and industrial chemicals from Chilean salt flats, with the Atacama brine operation as its core asset. The competitive edge is low-cost brine extraction, which is among the cheapest lithium production globally, and a long-dated Corfo partnership that gives it a route to expand output beyond the original concession. Revenue growth of 136.7% reflects a sharp lithium price recovery from a depressed base, so the earnings base is cyclical and the trailing P/E of 12.7 flatters a business whose forward multiple is 24.2, which implies the market expects normalisation. With a 48.8% operating margin and 21.8% ROE, the question for a portfolio manager is whether current pricing holds long enough to justify the forward multiple, and that is worth a deeper look at the lithium price deck and the Corfo capacity timeline.