Core Business Remains Solid, While New Ventures Offer Promise: “SK Chemicals Has Gained Another Growth Driver”

[Financial News] LS Securities said on the 3rd that SK Chemicals is expected to expand its growth drivers through new businesses. However, it did not provide an investment rating or target price.
Jung Kyung-hee, an analyst at LS Securities, noted, “The non-deal roadshow (NDR) held last month confirmed that the growth potential of SK Chemicals’ solid core businesses, centered on copolyester and pharmaceuticals, as well as its new businesses, including recycling, functional materials, and SK Multi-Utility (MU), is becoming visible.”
She added, “Copolyester is a market where companies have greater pricing power than with commodity products, while vertical integration and technological expertise built over many years serve as barriers to entry. In pharmaceuticals, revenue growth could enable the company to pursue a margin-improvement strategy. In functional materials, the withdrawal of the market leader from the business will create an opportunity to expand its share in Europe.”
In particular, LS Securities expected MU to become a new source of earnings as it ramps up its distributed energy business in Ulsan Metropolitan City.
Jung forecast, “Unlike in the past, when MU sent surplus power back to KEPCO based on the system marginal price (SMP), it began selling power directly to the Ulsan distributed energy special zone at the end of May. In the medium to long term, additional electricity demand will emerge as the SK Group AI Data Center (AIDC), currently under construction nearby, begins phased operations next year.”
Regarding SK bioscience, in which SK Chemicals holds a 66.4% stake, she also said, “The results of the 21-valent pneumococcal Phase 3 clinical trial are expected to be announced next year. Whether the trial succeeds will mark a turning point in the revaluation of the value of the subsidiary stake.”
[email protected] Minji Seo Reporter