[Edaily Reporter Shin Ha-yeon ] S-OilCorporation(010950)is trading up more than 4% during the session, buoyed by an upward revision of its target price by securities firms.
According to MP Doctor on the 7th, as of 9:27 a.m., S-OilCorporation is trading at 122,200 won, up 4.53% from the previous trading day.
This is believed to be driven by investor sentiment following forecasts from the securities industry that structural cost-saving effects will materialize as Saudi Aramco’s Official Selling Price (OSP) turns negative starting in August.
In a report released today, Hana Securities stated, “A strong buying opportunity has returned,” and raised its target price for S-OilCorporation from 130,000 won to 200,000 won.
First, the firm projected that S-OilCorporation’s second-quarter operating profit would reach 1.02 trillion won, exceeding the market consensus by about 13%. The analysis noted that while profits in the refining segment declined, the lubricant base oil segment improved significantly, driven by a sharp rise in selling prices.
While third-quarter operating profit is expected to decline quarter-over-quarter due to a lag effect, the firm views this as a temporary phenomenon. It explained that once July passes, lower oil prices and OSP will be reflected in costs, enabling the company to generate high profits again based on strong spot refining margins.
Reflecting the strong refining margins and cost savings resulting from the OSP turning negative, operating profit estimates for 2026–2027 were revised upward by 25–40% from previous projections. Additionally, the target price was raised to 200,000 won to account for the profit contribution from the Shahin Project and the potential for increased dividends following the conclusion of the investment cycle.
Yoon Jae-sung, an analyst at Hana Securities, stated, “Considering refining margins higher than those during the 2018–2019 upcycle, structural cost-saving effects, strong performance in lubricant base oils, and dividend appeal, a revaluation of the company’s enterprise value is possible,” adding He emphasized, “Dividends per share (DPS) for 2026 and 2027 are projected to be 4,200 won and 9,000 won, respectively, with dividend yields potentially reaching 3.6% and 7.7%.”
In addition, forecasts suggest that domestic refiners could benefit indirectly as seasonal demand recovery coincides with disruptions to refinery operations in the Middle East. Lee Dong-wook, an analyst at IBK Investment & Securities, noted in a report released that day, “ SK Innovation(096770), and S-OilCorporation—which account for approximately 40% of global production of high-value-added Group III lubricant base oils—are positioned to be the biggest beneficiaries of the current global supply-demand tightness.”