Yuanta Securities expects the recovery momentum for S-OIL to be clear by the first quarter of 2022 as the oil refining sector speeds up from this month. As a result, the investment opinion "Buy" and the target price remained at KRW 160,000.
The current price of S-OIL is 101,500 won on the 16th. Yuanta Securities said in a report, "From September to the first quarter of 2022, the recovery momentum of its main business, the oil refining sector, is expected to be clear due to rising international oil prices, a recovery in refining margins and a drop in OSP (official sales price).".
Operating profits and losses, excluding inventory valuation gains and losses from oil price fluctuations, are expected to rise from 344.2 billion won in the first quarter of this year, 432 billion won in the second quarter to 436.9 billion won in the third quarter, 555.2 billion won in the fourth quarter, and 669 billion won in the first quarter of next year.
Yuanta Securities said, "In particular, we are looking forward to the first quarter of 2022, when the refining margin will recover to the level before COVID-19," adding, "We will maintain the target price of 160,000 won and investment opinion 'buy' until global demand for crude oil reaches 100 million barrels.".
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
