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[Alpha Biz=(Chicago) Reporter Paul Lee] Eugene Investment & Securities predicted that the battery deficit will continue for SK Innovation, and that the cost burden will continue unless there is an increase in forward demand beyond expansion. The company maintained its investment opinion 'buy' and lowered its target price from 216,000 won to 200,000 won.
"SK Innovation's performance in the fourth quarter is expected to be sluggish. Profits will decrease due to the quarterly average drop in international oil prices and refining margins and the base effect of inventory valuation gains and losses reflected in the third quarter," said Eugene Investment & Securities Co. He added, "The chemical and lubricant businesses are also expected to perform poorly as inventory profits that occurred in the third and fourth quarters are reflected in losses."
According to Eugene Investment & Securities, SK Innovation's expected sales and operating profit in the fourth quarter are expected to reach 19 trillion won and 137.9 billion won, respectively. SK On (battery) is expected to expand its deficit to 2.6 trillion won in sales and 187.5 billion won in operating losses.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
