[Edaily Reporter KIM YOON-JEONG ] SamsungSecurities assessed that SKC(011790)narrowed its loss in the second quarter thanks to improved profitability in its chemicals business, but noted that it will take more time to return to an overall profit. The firm maintained its “Hold” investment rating and lowered its target price by 33% from 140,000 won to 94,000 won.

On the 28th, Cho Hyun-ryul, an analyst at SamsungSecurities, stated, “We lowered the target price to reflect the recent decline in valuations of major peers and the decrease in the value of our stake in the semiconductor test solutions subsidiary.” He added, “While we may upgrade the investment rating if the possibility of a return to operating profit becomes clearly evident, we will maintain the ‘HOLD’ rating until then.”
SKC’s consolidated operating loss for the second quarter was 14.4 billion won, an improvement of 14.3 billion won from the previous quarter and better than the market consensus (-18.7 billion won). It also met SamsungSecurities’ estimate (-15.9 billion won).
The narrowing of the loss was driven by improved performance in the chemicals business. Operating profit for the chemicals division reached 30.5 billion won, a 218% increase from the previous quarter. Although production volumes declined due to the fallout from the war in the Middle East, profitability was maximized through price hikes. However, SamsungSecurities expects profit growth to slow starting in the third quarter due to a decline in the propylene glycol (PG) spread and losses from styrene monomer (SM).
SK Nexilis saw sales volume increase by 47% compared to the previous quarter, driven by expanded sales of products for energy storage systems (ESS) in North America. Although the company continued to post an operating loss of 30.8 billion won, its operating profit margin (OPM) improved from -20.8% to -12.1%. However, analysts noted that the loss trend persisted due to ongoing initial costs associated with the launch of a new production line in Malaysia.
The semiconductor materials division recorded an operating profit of 21.3 billion won, driven by continued growth in socket sales fueled by demand from artificial intelligence (AI) data centers. However, profitability slowed slightly compared to the previous quarter due to the impact of meeting demand for legacy memory.
SamsungSecurities projected a consolidated operating loss of 14.8 billion won for the third quarter. This figure falls short of the market consensus (-8.0 billion won). SamsungSecurities assessed that while quarterly earnings are continuing to improve, more time is needed before a return to profitability can be confirmed.
SamsungSecurities viewed the increase in SK Nexilis’ sales volume—driven primarily by customers outside its affiliate (captive) base—as a positive development. However, given that the company is still posting operating losses, the firm believed a conservative approach is necessary until a return to profitability becomes evident.