[Edaily Reporter Park Jung-Soo ] On the 3rd, LS SECURITIES assessed that while SKCHEMICALS(285130)’s core businesses—copolyester and pharmaceuticals—remain solid, the growth potential of new businesses, such as recycled and functional materials and SK Multi-Utility (MU), is becoming increasingly evident. The firm did not provide an investment opinion or a target price. The previous day’s closing price was 52,200 won.
Jeong Kyung-hee, an analyst at LS SECURITIES, explained, “During the non-deal roadshow (NDR) held last August, we confirmed that, in addition to the solid core businesses centered on copolyester and pharmaceuticals, the growth potential of new businesses such as recycled and functional materials, as well as MU, is becoming increasingly apparent.”
SKCHEMICALS reported consolidated revenue of 745.1 billion won in the second quarter of this year, a 25% increase year-over-year, and returned to profitability with an operating profit of 32.3 billion won. The improvement in earnings was driven by increased copolyester sales volume and higher selling prices, an expanded profit contribution from MU, and a reduction in losses at SK BIOSCIENCE. On a non-consolidated basis, the company also recorded revenue of 479.1 billion won and an operating profit of 31.9 billion won, achieving its highest quarterly revenue ever.
The company highlighted the competitiveness of its flagship copolyester business. The copolyester and monomer business continued to operate at full capacity, driven by robust demand in the second quarter. Despite rising costs, the company maintained high profitability by raising average selling prices (ASP) to levels exceeding cost increases, and in early Q3, it implemented additional price hikes, particularly for high-value-added products. The company also cited as a strength the fact that the global market is dominated by SKCHEMICALS and its competitors, creating high barriers to entry and allowing it to pass on most of the cost increases to selling prices.
MU was identified as a new source of profit. MU began directly selling electricity to companies within the Ulsan Distributed Energy Special Zone in late May, recording approximately 110 billion won in revenue and about 21 billion won in operating profit in the second quarter, marking a return to profitability compared to the previous quarter. Starting in the third quarter, as related earnings are fully reflected, profits are expected to exceed those of the second quarter.
In the medium to long term, the company projected that artificial intelligence data centers (AIDCs) will serve as an additional growth driver. MU plans to directly supply power to the nearby SK Group AIDC once it begins phased operations starting in 2027. With power demand for facilities such as AIDC-A expected to range from 40 to 65 megawatts (MW), the company anticipates generating additional revenue by securing a stable, long-term customer base.
The recycling and functional materials businesses were also identified as growth pillars. SKCHEMICALS is expanding its recycling business in response to stricter recycling regulations, such as Europe’s Packaging and Packaging Waste Regulation (PPWR), and aims to reach the break-even point (BEP) by 2027. In the functional materials sector, the company is expanding its applications to include electric vehicles (EVs), batteries, solar backsheets, cables, and AI data center components. In particular, with Europe’s leading player expected to withdraw from this business in 2027, the company anticipates opportunities to increase its market share in the region.
The value of its stake in SK BIOSCIENCE was also cited as a factor for the revaluation. SKCHEMICALS holds a 66.4% stake in SK BIOSCIENCE. As of the 2nd, SK BIOSCIENCE’s market capitalization stood at approximately 2.94 trillion won, meaning the value of SKCHEMICALS’ stake amounts to about 1.95 trillion won. This is more than double SKCHEMICALS’ own market capitalization of approximately 903 billion won.
Analyst Jeong noted that the results of the Phase 3 clinical trial for the 21-valent pneumococcal vaccine, which SK BIOSCIENCE is jointly developing with Sanofi, are scheduled to be announced in 2027, and predicted, “Whether it succeeds or fails will be a turning point for the revaluation of the subsidiary’s equity value.”