[Click e-Stock] "SK Eturnix: Triple Momentum from Policy, Demand, and Capital... Target Price Raised"

Shin Young Securities Sets SK Eturnix Target Price at 60,000 Won

On July 8, Shin Young Securities announced that it expects SK Eturnix's earnings to grow, citing the expansion of domestic renewable energy market demand, supportive policies, and the company’s capital structure optimization. The firm raised its target price from 30,000 won to 60,000 won while maintaining a 'Buy' investment rating.

Sera Park, a research analyst at Shin Young Securities, stated, "With cooperation from financial investors (FIs), assets under management (AUM) have expanded rapidly, enabling the company to pursue a business model akin to that of an asset management company (AMC). In addition, as brokerage sales are accumulated, the company is demonstrating increasingly stable cash generation capabilities."

She further commented, "In addition to the unprecedented surge in demand triggered by artificial intelligence (AI), the share of renewable energy as a clean energy source is expected to rise rapidly. The company’s competitiveness as a stable renewable energy supplier has already been proven." She added, "Going forward, with continued policy benefits and confirmed market demand, SK Eturnix is expected to maximize its profits through capital structure optimization."

The domestic renewable energy market entered a phase of expanding demand following the government’s mega-project announcement. The government has projected demand totaling 39.7GW, breaking down as 6.3GW for the semiconductor cluster in the southwestern region, 15GW for the semiconductor industry base in the capital area, and 18.4GW for AI data centers. If converted to a simple annual basis under a 24-hour constant load, this amounts to approximately 348TWh per year, which is about 58% of Korea’s total electricity generation of 596TWh in 2024 and roughly 1.8 times the total domestic nuclear power generation of 189TWh.

To address the growing electricity demand, the government has declared its intention to deploy all available resources. In particular, the policy direction to expand the role of renewable energy is noteworthy. The government has set targets of 100GW in cumulative renewable energy installed capacity by 2030 and a renewable energy generation share of over 30% by 2035. It also announced plans to expand flexibility resources such as energy storage systems (ESS) and pumped-storage hydropower in parallel.

Park noted, "The government is demonstrating a commitment to absorb new electricity demand from AI data centers and semiconductor clusters through a distributed power grid centered on renewable energy. Considering that the current direct power purchase agreement (PPA) system is designed on the premise of renewable energy electricity supply, renewables are expected to stand out as a power source with regulatory and commercial advantages for long-term procurement by large power buyers (offtakers)."

Profit growth driven by capital structure optimization is also anticipated. In March, SK Eturnix decided to sell a combined 43.5% stake (worth 347.9 billion won) held by its largest shareholders SK Discovery and Hahn & Company. Park explained, "The original expected closing date for the stock purchase agreement was June 30, but since the announcement of the main renewable energy platform contract between SK and KKR, the transfer of key affiliates' renewable energy business units is underway, so the stake sale is likely to be finalized within the year. Through renewable energy platform cooperation with KKR, the company is expected to shift away from holding assets solely through its own capital and establish a structure that enables the expansion of AUM."

Shin Young Securities estimates SK Eturnix's second-quarter revenue and operating profit at 257.9 billion won (up 294.8% year-on-year) and 14.2 billion won (up 47.6%), respectively.

This content was produced with the assistance of AI translation services.