[Click eStock] "SK Inno, Surprise Q1 Earnings... Battery Loss Reduction Drives Stock Momentum"

[Asia Economy Reporter Ji Yeon-jin] Samsung Securities announced on the 18th that SK Innovation is expected to post a surprise first-quarter performance due to the sharp rise in international oil prices and strong refining margins caused by the Russia-Ukraine war, but it maintains a target price of 330,000 KRW and its top pick status within the sector, considering the discount rate of its battery subsidiary.

Cho Hyun-yeol, a researcher at Samsung Securities, said, "While S-Oil's stock price has risen 27% since March, SK Innovation's stock price has only increased by 3%, which is due to a larger-than-expected battery deficit and increased preference for pure refining stocks," adding, "In the first half of the year, strong refining performance is expected to support consolidated earnings, and in the second half, a meaningful reduction in losses in the battery business is expected to act as momentum for the stock price."

SK Innovation's operating profit for the first quarter of this year is expected to be 1.3018 trillion KRW, exceeding the recently raised consensus (1.0139 trillion KRW) by an additional 28%. Inventory-related profits have significantly increased due to rising oil prices, and refining margins have improved, leading to expected surpluses in the chemical and lubricants sectors. However, the battery division is expected to continue posting losses due to ongoing initial fixed cost burdens from the start-up of new plants in the United States and Hungary.

This content was produced with the assistance of AI translation services.