A096770 Will Face Rich Multiple Despite Weakening Revenue And Margin Outlook

Analysts have raised their fair value estimate for SK Innovation from 60,643.10 South Korean won to 67,727.55 South Korean won, citing a lower perceived discount rate and higher future valuation multiples, which more than offset weaker expectations for revenue growth and profit margins.

What's in the News

• SK Innovation announced a large private placement of series 1 unregistered, unsecured private convertible bonds totaling approximately KRW 600 billion, with multiple institutional investors participating and board approval secured ahead of the expected October 31, 2025 closing (Key Developments).
• The convertible bonds carry a zero coupon, mature on October 31, 2027, and can be converted between October 31, 2026 and October 25, 2027 into 4,852,796 shares at a conversion price of KRW 123,642 per share (Key Developments).
• On October 31, 2025, SK Innovation closed the previously announced private placement transaction and secured additional long term funding (Key Developments).
• SK Innovation plans to implement a co CEO structure by appointing current Executive President Jang Yong ho as Chief Executive Officer alongside incumbent CEO Choo Hyeong wook, with Jang formally taking the role at the March 2026 annual general meeting (Key Developments).

Valuation Changes

• The Fair Value Estimate has risen moderately from ₩60,643.10 to ₩67,727.55, reflecting a higher assessed intrinsic value for SK Innovation shares.
• The Discount Rate has fallen significantly from 11.37 percent to 9.75 percent, indicating a lower perceived risk or cost of capital in the updated valuation model.
• Revenue Growth has been downgraded from a 2.31 percent expected decline to a deeper 4.29 percent expected decline, pointing to weaker top-line prospects than previously assumed.
• The Net Profit Margin has been reduced from 1.66 percent to 0.52 percent, signaling a substantial cut to profitability expectations.
• The Future P/E has increased sharply from 14.24 times to 49.36 times, implying a much higher valuation multiple on projected earnings despite softer growth and margin assumptions.