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SK Innovation

096770 · KOSPI · ₩096770 · SK이노베이션

₩139,700▲ ₩1,200 (0.87%)End-of-day · Oct 28, 2026 · End-of-day prices.
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Valuation model · Discounted cash flow (DCF)

We use a 5-year discounted cash flow: the value of the cash the business is expected to produce, in today's money.

Fair value per share

With these assumptions the model gives no positive value.

Enterprise value
₩23T
Equity value
−₩6.6T
WACC
5.7%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal. This is not financial advice.

Why the model and the price differ

The model gives no positive value at these assumptions. What we can see:

  • To match today's price of ₩139,700, the model needs an operating margin of 4.5% every year (it uses 2.9%).
  • Or revenue growth +18.9 points a year higher than assumed in each of the 5 years.
  • Analysts' forecasts for 2026: revenue ₩102T, operating profit ₩10T (9.8% margin) (1 broker). The model starts from the last 12 months reported.
  • Analysts' forecasts for 2027: revenue ₩82T, operating profit ₩5.1T (6.2% margin) (1 broker). The model starts from the last 12 months reported.
  • In the projection, spending on equipment, software and working capital takes most or all of the after-tax operating profit, so free cash flow is thin. Companies that invest heavily often look like this until spending slows.

Treat the model as a starting point: change the assumptions to the story you believe, and compare with the multiples check below.

Bear / Base / Bull

Bear
—
Base
—
Bull
₩404,983
+189.9%

Bear: revenue growth 3 points lower every year, EBIT margin 2 points lower, WACC 1 point higher. Bull: the opposite.

Assumptions

Sign in to change the assumptions and see the results update. Sign in

Cycle options

Start from

Preliminary results are the company's early announcement of a quarter's sales and operating profit, before the full report. Including them swaps that quarter in for the same quarter a year earlier.

Margin path

Every year uses the cycle-average margin (2.9%).

Revenue growth

  • 0.9%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (0.9% a year, annual reports), fading to 3% by year 5.

  • 1.5%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (0.9% a year, annual reports), fading to 3% by year 5.

  • 2%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (0.9% a year, annual reports), fading to 3% by year 5.

  • 2.5%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (0.9% a year, annual reports), fading to 3% by year 5.

  • 3%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (0.9% a year, annual reports), fading to 3% by year 5.

Business

  • 2.9%

    Operating profit as a share of revenue.

    Default: through-the-cycle average of the last 12 months and the last 5 annual reports' operating margins.

  • 27.5%

    Share of operating profit paid as corporate tax.

    Default: Korea's top corporate tax rate (25%) plus 10% local income tax.

  • 9.5%

    The non-cash cost of wearing out equipment, added back to cash flow (% of revenue).

    Default: not in the statements, so 80% of capital spending (most spending replaces equipment that wears out).

  • 11.9%

    Money spent on factories, equipment, software and other long-term assets (% of revenue).

    Default: average of the last 3 annual reports (cash flow statements; equipment and intangibles).

  • 1.4%

    Stock and unpaid customer bills, less unpaid supplier bills, as a % of revenue. Each year's extra revenue ties up this much more cash.

    Default: working capital (current assets less cash and deposits, minus current liabilities other than borrowings) as a share of revenue, averaged over the last 3 years.

Discount rate

  • 2%

    How fast cash flows keep growing every year after year 5.

    Default: about Korea's long-run inflation plus real growth.

  • 4.11%

    Yield on Korea's 10-year government bond: the return with almost no risk.

    Default: Korea Treasury Bond 10-year yield on 2026-10-28.

  • 0.6

    How much the share moves when the market moves: 1 means just like the market.

    Default: 105 weeks of weekly returns against KOSPI (official index); raw beta 0.38, adjusted toward 1 and kept between 0.6 and 2.0.

  • 5.5%

    The extra return investors want for owning shares instead of bonds.

    Default: a typical premium for Korean shares.

  • 5.61%

    The interest rate the company would pay to borrow.

    Default: the 10-year yield plus a 1.5% credit spread.

Starting point

Revenue (TTM to H1 2026)
₩93T
Net debt (borrowings and leases − cash and deposits)
₩26T
+ Stakes and investments
₩8T
Associates, long-term financial assets and deposits (book value)
− Minority interests
₩12T
Shares
170,301,214
incl. 1,248,426 preferred
Share price
₩139,700
Market cap
₩24T

TTM = trailing 12 months: the last four reported quarters added together. "TTM to H1 2026" is the 12 months up to the latest quarterly or half-year report (H1 = to the end of June). Year 1 grows from there.

Past years and projection

Grey columns are reported results from the annual reports (after-tax EBIT at the model's tax rate), so you can check the growth and margin assumptions against the past. Years 1–5 are the model.

FY2023FY2024FY2025Year 1Year 2Year 3Year 4Year 5
Revenue₩77T₩75T₩80T₩94T₩96T₩97T₩100T₩103T
Growth−1.0%−3.3%7.5%0.9%1.5%2.0%2.5%3.0%
EBIT₩1.9T₩315B₩449B₩2.7T₩2.8T₩2.8T₩2.9T₩3T
EBIT margin2.5%0.4%0.6%2.9%2.9%2.9%2.9%2.9%
After-tax EBIT₩1.4T₩229B₩325B₩2T₩2T₩2T₩2.1T₩2.2T
+ Depreciation———₩8.9T₩9.1T₩9.3T₩9.5T₩9.8T
− Capital spending₩11T₩10T₩5.7T₩11T₩11T₩12T₩12T₩12T
− Working capital−₩5.2T−₩1.6T₩1.4T₩12B₩20B₩27B₩34B₩42B
Free cash flow———−₩292B−₩304B−₩317B−₩331B−₩348B
Discount factor———0.9460.8960.8480.8020.759
Present value———−₩276B−₩272B−₩268B−₩266B−₩264B

Terminal value ₩32T, worth ₩25T today: 106% of enterprise value. It assumes spending settles at 110% of depreciation once growth slows to the terminal rate.

Cross-check: what the market has paid before

For cyclical businesses, analysts check a DCF against the multiples the stock has traded at through past cycles. Price / book is the usual anchor for them: P/E looks highest at the bottom of a cycle, when earnings are smallest, and lowest at the top. The price each band would give today:

LowTypicalHigh
Price / book (book value ₩153,791 a share)Now 0.91×₩117,6570.77×₩154,6431.01×₩306,9122.00×

Low, typical and high are the 10th percentile, middle and 90th percentile of month-end multiples since 2021, each against the latest report out by then, per share at today's share count; loss years and P/E above 100 are left out. Run-rate earnings are one quarter × 4, not a forecast. Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Sensitivity

Fair value per share as two inputs change; the middle is the current case.

WACC ↓ · Terminal growth →1.0%1.5%2.0%2.5%3.0%
4.7%——₩25,034₩72,852₩149,514
5.2%———₩19,982₩66,595
5.7%————₩15,067
6.2%—————
6.7%—————

Now (TTM)

Market cap
₩24T
Enterprise value
₩47T
P/E
—
P/B
0.9×
P/S
0.3×
EV/EBITDA
—
Dividend yield
0.0%

Over time (at each year end)

20252024202320222021
Price₩101,200₩112,000₩140,300₩154,000₩238,500
Market cap₩17T₩19T₩24T₩26T₩40T
P/E——92.6×13.7×—
P/B0.8×0.8×1.1×1.3×2.3×
P/S0.2×0.3×0.3×0.3×0.9×
EV/EBITDA—————
Dividend yield0.0%1.8%———

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
SK Innovation—0.9×0.3×—0.0%
S-Oil9.3×1.4×0.4×—0.3%
Hankook Shell Oil13.3×5.6×1.9×—0.0%
Michang Oil IND1.6×0.4×0.5×—3.0%
Kukdong Oil & Chemicals10.1×0.5×0.1×—6.1%
Similar companies (median)9.7×1.0×0.4×—1.6%

Calculated from end-of-day prices and filed financial statements. Not a recommendation. This is not financial advice.

Also known as: SK Innovation / SK이노베이션 / 096770 / KRX:096770

Source: KRX statistical information