SK innovation(316,000 -0.47%) Individuals’ concerns about the stock price are deepening. This is because the stock price surged in the short term, raising doubts about further upside. Securities companies also have mixed short-term outlooks for stock prices, but they have a strong consensus that long-term purchases are still valid.
◆ SK Inno with a higher proportion of individuals
On the 3rd, SK Innovation closed the deal at 316,000 won, down 0.47%. The increase rate this year is 66.31%. During the same period, it surpassed Samsung SDI (20.70%) and LG Chem (21.23%). This is due to the added benefit of resolving uncertainty as the Korean government urged an immediate resolution of a battery patent infringement lawsuit against LG Chem in the US.
As the stock price soared, personal concerns grew. As it has settled in the 300,000 won range, individuals’ desire to realize profits is growing. SK Innovation is a stock with an increased proportion of individuals last year. As of the end of 2019, the share of minority shareholders of SK Innovation was 31.39%. At the end of the third quarter of last year, it soared to 45.02%.
This is the result of individuals steadily collecting shares of SK Innovation, which is considered an undervalued stock in rechargeable batteries. However, the stock price did not exceed the 130,000 won range until October. As the uptrend began in November, individuals sold 3358 billion won worth in the fourth quarter alone. Reflecting this, the proportion of minority shareholders as of the end of last year is estimated at 43.07%.
As stock prices rose further this year, individuals began to collect SK Innovation stock prices again. I bought over 500 billion won this year. As of the past 2nd, the estimate of the proportion of minority shareholders is 44.92%. I bought it more expensive than the version price in the fourth quarter of last year. This is the reason why individuals who have had the experience of selling once and seeing it rise further have to deepen their worries between realizing profit and holding.
◆Securities companies whose target stock is rapidly raising
Securities companies also have mixed valuations over soaring stock prices. Along with the announcement of the fourth quarter of last year, nine of the 12 securities companies that released their report this month raised target prices. Daishin Securities offered 400,000 won, 66.6% higher than before. The target price average jumped from 189,000 won a month ago to 304,000 won. An analyst at a securities firm said, “We had to hurry up the target price.”
Securities companies have also changed their target price arithmetic method to respond to the higher share price. KB Securities applied a method of calculating a target price by adding the value of each business unit instead of the conventional method that referred to return on equity (ROE). Baek Young-chan, a researcher at KB Securities, explained, “This is because the business value of batteries and separators has skyrocketed based on aggressive expansion.” The target price is KRW 340,000. Other securities companies that raised their target price are expected to have additional upside potential based on the battery business value.
◆Short-term fluctuation factors
There are also concerns in the short term. The recovery of the refining industry, its main business, is still in the midst. The refining margin, which influences the performance of the refining division, is still in the $1 range, far below the break-even point ($4-5). The accumulation of deficits in the refining division led to financial burdens. The current ratio, which shows short-term financial stability, deteriorated from 166.0% at the end of 2019 to 132.6% in the third quarter of last year. The usual’healthy’ level is above 200%.
Jae-sung Yoon, a researcher at Hana Financial Investment, said, “Considering the sluggish oil refining business and the scale of battery investment, the current high financial burden is a risk factor that needs to be addressed.” did. Hana Financial Investment has set a target price of 280,000 won, which is lower than the current stock price.
Another short-term volatility factor is the size of the litigation agreement with LG Chem. If the results of the lawsuit come out on the 10th, it is highly likely to settle. However, there is a large difference in the size of the settlement funds that the two sides think. Depending on the outcome of the settlement, SK Innovation’s financial burden may increase.
Lee Ji-yeon, a researcher at Shinyoung Securities, said, “Through aggressive expansion, the target production volume in 2025 from 100 gigawatts has risen to 125 gigawatts.” It will,” he predicted.
Reporter Yoon Sang Ko [email protected]