Securities firms are raising their expectations for SK Innovation, judging that the company is entering the final stage of restructuring this year, increasing the likelihood of a return to the black.
Hwang Gyu-won of Yuanta Securities Korea said on the 29th, "After a big bath (one-off disposal of bad assets), a return to the black can be expected this year," adding, "After recognizing a large impairment loss in January this year, the share price will gradually enter a recovery phase." The target price was set at 150,000 won.
This year's projected results are sales of 70.1 trillion won, operating profit of 1.6 trillion won, and net income attributable to controlling shareholders of 358 billion won. The bottom line would improve significantly from a loss of about 3.2 trillion won last year. The analysis is that the company will be free from the burden of impairment losses in the battery institutional sector (about 4.2 trillion won) incurred during restructuring, and that an improvement in the chemical institutional sector (PX) market is expected.
It also noted that SK Innovation has entered the final stage of restructuring. Following the 2024 merger with SK E&S (power plant) and last year's 8 trillion won in external financing, two facility downsizing moves are set for this year. While SK On's battery production capacity (capex) will be reduced by about 24%, restructuring of SK geocentric's Ulsan chemical institutional sector is also pending.
On the same day, Yoon Jae-sung of Hana Securities said, "SK On's sluggish performance and high borrowing fund remain risks," but added, "However, considering the possibility of further restructuring at SK On and performance improvement centered on refining and chemicals, the potential for additional share price declines is limited."
He continued, "First-quarter operating profit is estimated at 588.1 billion won, above the market consensus of 388.4 billion won," adding, "On an annual basis, operating profit is expected to surge 580% year over year to 2.76 trillion won."
At the same time, the investment opinion on SK Innovation was raised to "buy," and the target price was increased from 130,000 won to 140,000 won.