Corporate Logo(source: s-oil.com)
Shinhan Investment Corp. announced on July 10 that although S-Oil (010950) is expected to report weak second-quarter results, a stronger industry outlook in the second half justifies a more positive view. The firm raised its target price from 70,000 won to 80,000 won and maintained its “Buy” rating.
Shinhan estimates that S-Oil will post an operating loss of 241.6 billion won for the second quarter, significantly wider than the current market consensus of a 144.5 billion won loss.
Lee Jin-myung, an analyst at Shinhan Investment Corp., stated, “The weak performance was largely driven by an inventory valuation loss of 211.3 billion won, stemming from a sharp decline in global oil prices and a drop in the exchange rate.” He added that the refining segment alone likely posted an operating loss of 323 billion won.
Despite the short-term weakness, the outlook for the second half remains optimistic. “Although expanding supply may keep oil prices under downward pressure, the likelihood of a sharp decline from current levels appears limited. In contrast, refining margins—an important profitability indicator for the industry—are expected to remain resilient under lower oil price conditions, creating upward pressure on overall market conditions,” Lee explained.
He further noted, “S-Oil’s 12-month forward price-to-book ratio (PBR) remains at 0.8 times, which is still near the lower end of its historical valuation range.”
*[KOSPI]S-Oil(010950) is one of the four major oil refining companies in South Korea, with diversified businesses including oil refining, petrochemicals, and lube base oil. Market capitalization is 7.149 trillion won (as of July 9, 2025, closing price).
Corporate Logo(source: s-oil.com)
Shinhan Investment Corp. announced on July 10 that although S-Oil (010950) is expected to report weak second-quarter results, a stronger industry outlook in the second half justifies a more positive view. The firm raised its target price from 70,000 won to 80,000 won and maintained its “Buy” rating.
Shinhan estimates that S-Oil will post an operating loss of 241.6 billion won for the second quarter, significantly wider than the current market consensus of a 144.5 billion won loss.
Lee Jin-myung, an analyst at Shinhan Investment Corp., stated, “The weak performance was largely driven by an inventory valuation loss of 211.3 billion won, stemming from a sharp decline in global oil prices and a drop in the exchange rate.” He added that the refining segment alone likely posted an operating loss of 323 billion won.
Despite the short-term weakness, the outlook for the second half remains optimistic. “Although expanding supply may keep oil prices under downward pressure, the likelihood of a sharp decline from current levels appears limited. In contrast, refining margins—an important profitability indicator for the industry—are expected to remain resilient under lower oil price conditions, creating upward pressure on overall market conditions,” Lee explained.
He further noted, “S-Oil’s 12-month forward price-to-book ratio (PBR) remains at 0.8 times, which is still near the lower end of its historical valuation range.”
*[KOSPI]S-Oil(010950) is one of the four major oil refining companies in South Korea, with diversified businesses including oil refining, petrochemicals, and lube base oil. Market capitalization is 7.149 trillion won (as of July 9, 2025, closing price).