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[Alpha Biz=(Chicago) Reporter Paul Lee] SK Innovation fell far below its operating profit estimate in the fourth quarter of last year. Amid the continued difficult business conditions in the first quarter of this year, SK On, a subsidiary of its battery business, is expected to perform poorly due to the cost of operating a new plant. As a result, there was an investment opinion that SK Innovation's target stock price would be lowered by 18%.
Daishin Securities lowered its investment opinion by 28% from 250,000 won to 180,000 won while maintaining its "buying" on SK Innovation on the 7th. It reflected the downward revision of annual profit estimates due to the possibility of SK On's slowing performance in the first half of the year. SK Innovation's closing price on the 6th is 128,000 won.
SK Innovation recorded operating profit of 72.6 billion won in the fourth quarter of last year, below market expectations (310.2 billion won). Operating losses in the oil refining sector fell 1.2 trillion won on-quarter to 165.2 billion won. This is due to a drop in inventory valuation losses of KRW 230 billion and refining margins due to falling oil prices.
The spread improved on the back of falling costs to 217 billion won in the lube base oil sector, but it profited from the disappearance of inventory effects that occurred in the previous quarter. The oil development (E & P) sector recorded 107.1 billion won and the battery sector 18.6 billion won.
SK Innovation's operating profit in the first quarter of this year was estimated at 500 billion won. The oil refining sector is expected to reach 327.6 billion won, soaring petroleum product prices and improving refining margins since January. However, SK ON estimated that the operating loss would increase to 184.7 billion won.
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
