[Click eStock] "SK Ino, Time Needed for Stock Recovery... Investment Opinion 'Neutral'·Target Price Down"

Hyundai Motor Securities lowered the target price for SK Innovation from 225,000 KRW to 193,000 KRW on the 27th. The investment rating was also downgraded from Buy to Market Perform.

SK Innovation recently announced a plan for a paid-in capital increase worth 1.18 trillion KRW. The company stated that it plans to invest the raised funds in future businesses such as hydrogen projects centered on ammonia and biomass projects utilizing waste. Of the raised funds, 409.2 billion KRW is expected to be used for acquiring securities of other companies for these investments.

The peak oil period (the point at which oil production reaches its highest level) is being brought forward from the 2030s to the 2020s. Accordingly, SK Innovation’s 'Carbon to Green' strategy needs to accelerate further. Hyundai Motor Securities noted that maintaining a stable financial structure is necessary for this, and at the same time, they agree on the necessity of the paid-in capital increase to secure investment funds.

However, the results of new businesses that SK Innovation is investing in?such as hydrogen ammonia (92.4 billion KRW), SAF production using waste (224.4 billion KRW), and securing next-generation CCSU technology (92.4 billion KRW)?are expected to appear after 2025, so it will take time before the corporate value improvement effects become evident.

Kang Dong-jin, a researcher at Hyundai Motor Securities, said, "Investment in future growth businesses through the paid-in capital increase is positive, but it will take time for the effects to be reflected," adding, "Since it is expected that it will take time for the stock price recovery through the reflection of new business investment results, the investment rating is downgraded."

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