[THE INVESTOR] SK’s unlisted subsidiaries are propelling its strong earnings, said KB Investment and Securities on May 17, maintaining a “buy” recommendation and raising the target price to 380,000 won (US$352.11) from 360,000 won.

Its operating profit in the first quarter declined 7.4 percent to 1.58 trillion won, below market expectations, but net profit came in at record 661.1 billion won. Unlisted firms SK E&S and SK Siltron posted earnings surprise with 260.6 billion won and 87.1 billion won operating profit, repectively, said analyst Kim Jun-seop. 

SK E&S was boosted by the system marginal price rise in electricity market. Operation ratio of its natural gas power generators was above 92 percent in the period and the level will be maintained due to high oil prices. 

SK’s operating profit in the second quarter will surge 50.5 percent on-year to 1.66 trillion won, according to the analyst adding that SK Siltron will remain strong and listed subsidiaries including SK Innovation will also show improvement in earnings, he forecast. 

By Hwang You-mee (glamazon@heraldcorp.com)