Hyundai Motor Securities raised S-Oil's target price from 57,000 won to 67,000 won on the 18th. However, it maintained a conservative investment opinion of 'market perform (Market Perform·6-month revenue ±15%)'.
Kang Dong-jin, a researcher at Hyundai Motor Securities, cited the falling refining margins (the profit after subtracting costs such as crude oil prices from petroleum product prices) as a reason after the stabilization of Middle Eastern affairs.
He noted, "Recently, the refining margins have been weak, centered on gasoline, naphtha, and high-sulfur fuel oil," and added, "While the scale of facility closures may exceed expectations and supply and demand might stabilize somewhat, there aren't many clear factors driving strong demand." He continued, "China's rapid increase in jet fuel exports is also a threat."
Kang explained that the difficult petrochemical market also means that the results of S-Oil's 'Shahin Project' should be examined. S-Oil is constructing a large-scale complex petrochemical plant in Ulsan with a total investment of over 9 trillion won. When it starts full operation in 2026, it will be able to produce 1.8 million tons of ethylene, 770,000 tons of propylene, 200,000 tons of butadiene, and 280,000 tons of benzene.
Kang stated, "Prices of key products from the Shahin Project continue to weaken," and added, "Given that the construction cost per unit is considerable, it is uncertain whether it will act as a positive factor for S-Oil's revenue." He went on to say, "S-Oil's dividend appeal is not significant, and with uncertainties in performance in 2026, a trend-based rise in stock prices is premature."