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Meeting the market expectations, SK Innovation achieved an operating profit of more than KRW 500 billion for two consecutive quarters of 2021, surpassing the KRW 1 trillion won mark of operating profit in the first half of the year.<\/span><\/p>\n <\/p>\n Many Korean securities firms gave positive assessment of SK Innovation\u2019s performance in the second quarter, which was announced on August 4th<\/sup>, saying that the results met the market consensus. In addition, the securities industry evaluated that SK Innovation’s growth potential is still valid, saying that the decision to split the battery and E&P business announced on the same day had little effect on SK Innovation’s fundamentals.<\/span><\/p>\n <\/p>\n In this regard, Baek Young-chan, a researcher of KB Securities, summarized in a report on the 4th<\/sup> that “SK Innovation’s revenue and operating profit in Q2 are higher than Q1 and the same quarter of last year.” \u201cThe background of SK Innovation\u2019s earnings improvement is attributed to \u25b2a rise in gasoline profitability and positive inventory gains and losses, \u25b2a sharply reduced operating loss in the battery business, and \u25b2a widening spread of lube base oil.\u201d<\/span><\/p>\n <\/p>\n According to SK Innovation’s Q2 earnings announcement, the lubricant business recorded an operating profit of KRW 226.5 billion, up KRW 89.4 billion from the previous quarter, due to a sharp increase in margins due to tight supply and demand conditions such as a reduction in the utilization rate of refineries. This is the highest quarterly operating profit ever achieved since it became a subsidiary of SK Innovation in 2009. The industry also evaluates that the lubricant business has driven SK Innovation’s Q2 performance.<\/span><\/p>\n <\/p>\n The battery business recorded sales of KRW 630.2 billion due to the expansion of new sales, an increase of about 86% compared to the same period of the previous year. Moreover, it is recording a continuous increase in sales. Operating profit reached KRW 630.2 billion in Q2, following the record of KRW 523.6 billion in Q1, breaking the 500 billion won mark for two consecutive quarters.<\/span><\/p>\n <\/p>\n In the same report, researcher Baek Young-chan pointed out, “If we consider the long-term enhancement of corporate value, SK Innovation’s physical spin-off is clearly positive.” In addition, researcher Baek said, \u201cSecuring the battery market preemptively through active investment over the next two to three years will determine the battery enterprise value.\u201d \u201cThrough the spin-off, the investment in expanding battery business is possible under the support of the parent company (SK Innovation), and raising investment funds through an IPO will be positive enough for corporate value,\u201d Baek added.<\/span><\/p>\n <\/p>\n On July 1st<\/sup>, SK Innovation announced that it aims to grow into a global top based on the order backlog of “1 terawatt + \u03b1” EV batteries. SK Innovation has already secured a total annual battery production capacity of 40GWh in Korea, China, Hungary, and the U.S. This number is planned to increase rapidly to 85GWh in 2023, 200GWh in 2025, and more than 500GWh in 2030. In addition, SK Innovation’s battery business is growing in many ways, which can be seen through activities such as the decision to build a joint venture with Ford, which was announced in May.<\/span><\/p>\n <\/p>\n Park Yeon-joo, a researcher of Mirae Asset Securities, said in a report on the 4th<\/sup>, \u201cRecently, global automakers are speeding up the conversion into electric vehicles (EV).\u201d \u201cWhile high-quality EV battery makers are limited, SK Innovation\u2019s proven technology and strong will to invest more in the battery business are good indications for the increase of its battery business\u2019s value.\u201d In addition, Park analyzed, \u201cConsidering the oil refining and chemical businesses and the value of SK IE Technology\u2019s stake, the current share price of SK Innovation is excessively undervalued.\u201d<\/span><\/p>\n <\/p>\n In a report on the same day, Cho Hyun-ryeol, a researcher of Samsung Securities commented, \u201cEven with the spin-off news, SK Innovation\u2019s battery business value is discounted at a rate of more than 60% compared to competitors, so the discount rate of such highly undervalued business value will be cleared by catalysis of battery profit improvement.\u201d Jeon Yoo-jin, a researcher of Hi Investment & Securities, also said in a report on the 4th<\/sup>, “The current share price of SK Innovation does not reflect the battery business value at all.” Researcher Jeon pointed out, \u201cThere are still many positive factors, such as the expected improvement of refinery business improving in the second half of this year, the continued boom of lubricant business, and the battery business where the loss will be drastically reduced.\u201d Jeon continued by proposing a target price of KRW 400,000 for SK Innovation\u2019s stock.<\/span><\/p>\n <\/p>\n On a report released on the 5th<\/sup>, analyst Jeon Chang-hyun of IBK Investment & Securities said, \u201cSK Innovation\u2019s spin-off of battery business and E&P business is a decision for mid- to long-term development of the company.\u201d \u201cThe green growth strategy will be accelerated, and we expect new growth engines such as the metal recycling business for waste batteries,\u201d he added.<\/span><\/p>\n <\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Meeting the market expectations, SK Innovation achieved an operating profit of more than KRW 500 billion for two consecutive quarters of 2021, surpassing the KRW 1 trillion won mark of operating profit in the first half of the year. Many Korean securities firms gave positive assessment of SK Innovation\u2019s performance in the second … Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":6577,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3,347],"tags":[35,94,34,469,15,565,573],"class_list":["post-6574","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insight","category-trend_report","tag-battery","tag-ep","tag-electric-vehicles","tag-financial-results","tag-sk-innovation","tag-spin-off","tag-spinoff"],"acf":[],"_links":{"self":[{"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/posts\/6574","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/comments?post=6574"}],"version-history":[{"count":5,"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/posts\/6574\/revisions"}],"predecessor-version":[{"id":6581,"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/posts\/6574\/revisions\/6581"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/media\/6577"}],"wp:attachment":[{"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/media?parent=6574"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/categories?post=6574"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/askinno.com\/global\/wp-json\/wp\/v2\/tags?post=6574"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n\n\u25a0 Related articles <\/strong>
\n– SK Innovation to spin off battery business and E&P business<\/a>
\n– SK Innovation\u2019s Q2 2021 Financial Results: Operating profit hit KRW 506.5 billion with best-ever result in lubricants business and improvement in battery business<\/a><\/span><\/span><\/div>\n<\/div>\n<\/div>\n