[Click eStock] SK D&D, Pretty When You Look Closely

[Asia Economy Reporter Hwang Junho] On the 12th, SK Securities maintained the target price of SK D&D at 39,000 KRW. It forecasted that the real estate sector would benefit from synergy effects with SK REITs, and the renewable energy sector would require monitoring of long-term growth based on its pipeline.

SK D&D recorded high profit growth in the first quarter of this year, reflecting the sale of Jeju Hotel (241.6 billion KRW) and the recognition of progress in the Dangsan Saenggakgongjang project. In the second quarter, results improved further due to the smooth progress of Saenggakgongjang and the successful sale of the Samil Building.

Additionally, with steady revenue recognition from the Jeju Gasiri wind power project, if the Gunwi wind power project begins construction within the year, it is expected to be a year that includes EPC revenue as well. Regarding fuel cells, the Cheongju Eco Park, which began construction at the end of 2020, is scheduled for completion within the year.

SK Securities emphasized the need to analyze SK D&D’s performance by sector. In the real estate development sector, it expects synergy effects with SK REITs as ongoing developments in Myeongdong, Gangnam offices, and logistics centers are incorporated into the REITs.

The solar power business is targeting the start of construction in 2022 for the Dangjin project, for which business rights have been secured, and in the fuel cell sector, business rights for a 200MW scale project (as of the end of July) have also been secured.

Researcher Shin Seo-jeong of SK Securities analyzed, "Although the volatility in performance may appear large depending on the revenue recognition method in the real estate sector, which accounts for a large portion of sales, a closer look reveals that growth in each sector is sufficiently expected."