[Click eStock] "SK Chemical, 'Copolymer·Polymerization' Business Profit Margin 15%"

DB Financial Investment forecasted on the 20th that SK Chemicals' Copoly and petrochemical businesses will maintain high profitability for some time, with an operating profit margin approaching 15%.

SK Chemicals Pangyo Headquarters

SK Chemicals achieved a turnaround to operating profit of 8.9 billion KRW in the second quarter of this year. This was thanks to strong performance in the Copoly and petrochemical divisions and a reduced deficit from its consolidated subsidiary SK Bioscience. In the Copoly and petrochemical sectors, sales volume increased, resulting in revenue of 250.2 billion KRW. This figure represents an 18% increase compared to the same period last year, marking the highest quarterly revenue in eight quarters.

Seungjae Han, an analyst at DB Investment & Securities, stated, "Although profits are expected to slightly decrease in the third quarter, the expansion of high value-added product sales will allow the profit margin to remain above 13%. Starting next year, as the global economy rebounds and sales increase, significant profit growth will emerge."

The analyst added, "We have raised the discount rate on the equity value of the consolidated subsidiary SK Bioscience to 70%, lowering SK Chemicals' target stock price to 70,000 KRW, but we maintain a 'Buy' investment rating. Operating profit excluding SK Bioscience is expected to improve significantly from next year."

He further noted, "If the LNG combined power plant SK Multi Utilities (293MW), scheduled to begin operations in the second half of next year, starts operating, earnings estimates could be significantly revised upward."