Episode Details

Sociedad Quimica y Minera (SQM) Q2 2026 — SQM released Q2 2026 AFTER THE CLOSE on Tuesday August 18 (Santiago dateline; call at 12:00 EDT on the 19th), so Wednesday August 19 is the reaction session. Shares closed USD74.47 on Aug 18, OPENED USD76.01 (+2.07 pct), ranged USD74.56 to USD76.99, and traded USD76.46 (+2.67 pct) as at 10:45 ET - an INTRADAY reading, stated as such. Sociedad Quimica y Minera is Chile's lithium, iodine and specialty plant nutrition producer, operating the Salar de Atacama through the Nova Andino Litio joint company with state-owned Codelco. Q2 2026 net income was USD660.0M, or USD2.31 per share, against USD88.4M and USD0.31 a year ago - up 646 pct - on revenue of USD2.47bn, up 136.7 pct. THE CALL: AVOID (3/5, MEDIUM - A RECORD QUARTER THE OWNERS DO NOT KEEP) — base-case value ~$38.53 vs ~$76.46 today. KEY METRICS: - CALL: AVOID, 3/5. Fair value USD38.53 vs USD76.46 (-50 pct). Bear USD23 / base USD35 / bull USD56, weighted 25/45/30. Three streams: iodine, plant nutrition and Australia as a perpetuity; the Atacama to 2030; the Atacama 2031-2060 at halved economics. All at 9 pct. - THE PRINT: revenue USD2.47bn (+136.7 pct). Gross profit USD1.26bn (51.0 pct) vs USD253.0M (24.3 pct). EPS USD2.31 vs USD0.31 and a USD2.03 bar, a 13.8 pct beat. Record lithium volumes of 84.1kt LCE and a record iodine price of USD73.40/kg. Adjusted EBITDA USD1.32bn, 53.4 pct. - THE ANGLE: SQM accrued OVER USD1.6bn to the Chilean State in the half - its own disclosure - against USD1,024.7M of net income for shareholders. At least USD1.56 to the State per USD1.00 kept. Minority interest went USD1.0M to USD59.2M in a year as Codelco's share of the salar starts to arrive. - PRICE, NOT TONNES: of the USD1,334.0M lithium revenue increase, USD1,074.1M (80.5 pct) was price and USD259.9M (19.5 pct) was volume. Blended realised lithium went USD8.38 to USD21.16 a kilo. The June 2025 comparator was CLEAN - USD88.4M at a 39.2 pct tax rate, a price trough and not a charge. - THE 2031 RATCHET: under the Nova Andino Litio agreement Codelco holds 50 pct plus one share, manages the salar from 2031, and the State's capture of operating margin rises from about 70 pct to about 85 pct, running to 2060. Our bottom-up check reproduces the 70 pct at 68.8 pct, which validates the step-down. - WHAT YOU PAY: 13.2x our USD5.81 mid-cycle EPS but only 9.6x our USD7.99 peak-price 2026 estimate - that gap IS the cycle. The tape needs mid-cycle lithium at USD28.94/kg to 2060, above the record just posted. Street: 3 buy / 5 hold / 1 sell across 9 dated 2026 notes, average USD86.22 (+12.8 pct). What to watch: UP: two more quarters of realised lithium at or above USD21.80/kg with volumes still growing; Salar Futuro approval unlocking the 2.5 million tonne quota; iodine scaling toward 15,500 tonnes at the record USD73.40/kg price. DOWN: the minority-interest line continuing to climb as Codelco's share arrives; iodine volumes moderating as third-party supply lands; plant-nutrition conditions normalising toward year-end as the company itself expects. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.