[Click eStock] Shinhan Investment "SK D&D, Target Price 29,000 Won"

Shinhan Investment Corp. has issued a buy rating and a target price of 29,000 KRW for SK D&D.

On the 28th, Shinhan Investment Corp. released a report on SK D&D stating, "2023 is expected to be a year in which the company firmly establishes itself as a renewable energy developer."

It predicted that profits from the energy sector will increase to a level comparable to real estate development. Sales from energy are likely to surpass those from real estate development.

It forecasted 717.8 billion KRW in sales and 97.7 billion KRW in operating profit for 2023, representing increases of 27.4% and 51.8% respectively compared to the previous year.

Real estate development sales are expected to be 297.7 billion KRW, while energy sales are projected at 380.7 billion KRW. Operating profits by business division are forecasted at 51.2 billion KRW for real estate development and 50.5 billion KRW for energy.

The Gunwi Pungbaek onshore wind farm, which began construction in July last year, will be reflected in sales in 2023, and sales from the Uiseong onshore wind farm will start in the second half of the year.

In fuel cells, revenue recognition related to Chilgok Eco Park and Yakmok fuel cells is expected in the fourth quarter. The energy storage system (ESS) division's performance is expected to remain at the 2022 level, with sales of 40.7 billion KRW and operating profit of 11.7 billion KRW.

Since starting with the Jeju Gasiri wind farm in 2015, SK D&D currently operates wind power plants with a total capacity of 83MW, including the Uljin Hyeonjongsan wind farm. The Jeju Gasiri plant (30MW), in which the company holds 100% equity, generates annual sales exceeding 10 billion KRW.

Including the Gunwi Pungbaek wind farm (75MW), which began construction in July 2022, the company is developing a total capacity of 158MW. In 2023, construction will commence on the Uiseong Hwanghaksan wind farm (99MW).

In the mid to long term, offshore wind power projects are also underway. SK D&D is participating in the development of the Shinan Ui offshore wind power project (400MW) with Hanwha Construction and others, and the Incheon Gulupdo offshore wind power project (230MW) with Daewoo Construction and others. If the projects proceed as expected, sales related to offshore wind power are anticipated to begin from 2024 when construction starts.