SK Innovation is closer to an operating holding company built around oil refining (SK Energy, about 60% of revenue) alongside chemicals, lubricants, batteries (SK On), and E&S; it earns cash from its core refining and chemicals business to fund a loss-making battery subsidiary, and the company's value hinges on the value of the subsidiary stakes it holds. Around May, a run of financial support for subsidiaries followed, including participation in an SK On rights issue and debt guarantees, and it has continued to stabilize the finances of its loss-making businesses and simplify governance through the absorption of SK E&S, the merger of SK Enmove into SK On, and the purchase of all SK On convertible preferred shares for about ₩3.59 trillion. The recent picture is two-sided: the strengths are a turn to profit in refining and chemicals, a P/B of 0.69x that leaves the price low versus asset value, and a shrinking battery loss, while the cautions are earnings that partly reflect inventory gains, a financial burden with a 317% debt ratio, and the cash needs that will continue until SK On stands on its own.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt far exceeds equity (debt ratio 317.6%).
- Operating profit barely covers the interest bill (interest coverage below 1x).
- The most recent full-year net result was a loss.
- Revenue rose 8.1% year over year, and the pace is quickening (3-year trend: mixed).
- Most recent quarter (Q1 2026) revenue was 15.2% higher than a year earlier.
- ROE is -15.4% (controlling-interest basis). It is below the sector average.
- Operating margin is 0.6%.
- Valued against the net asset value (NAV) of its listed holdings rather than a consolidated P/E — see the in-depth valuation for the detailed basis.
Ownership & governance As of 2025-12-31
Largest shareholder SK Inc 52.09% (corporate)
Controlling bloc incl. related parties 52.09%
With the controlling bloc holding 52%, control is very secure but the free float is thin.
Net asset value (NAV) assessment Fairly valued
💡 How to read a holding company · A holding company owns stakes in several subsidiaries. Its P/E swings with equity-method gains and losses on those stakes, so read it only as a rough guide. P/B is more meaningful because subsidiary stakes sit in equity, but book value carries them at low historical cost (so P/B looks higher than reality). The most accurate view is the price against the market value of those stakes (NAV) ↓
Valued against the net asset value (NAV) of its listed holdings rather than a consolidated P/E — see the in-depth valuation for the detailed basis.
Listed subsidiaries ownership
| SK IE Technology | 53.35% |
🔎 In-depth analysis
- Rather than a single company that sells products directly, SK Innovation is closer to an operating holding company that owns several energy subsidiaries and in-house business units (CICs).
- It earns money along five broad lines. ① The largest pillar is oil refining (SK Energy), which buys crude and refines it into gasoline, diesel, and jet fuel, accounting for about 60% of total revenue. ② Chemicals (SK Geo Centric) makes plastic and synthetic-resin feedstocks; ③ lubricants (SK Enmove, merged into the battery subsidiary SK On in November 2025) makes thick-margin base oils and lubricants; ④ batteries (SK On, wholly owned) makes rechargeable cells for EVs; and ⑤ E&S (SK E&S, absorbed in November 2024) runs LNG imports, city gas, and power generation.
- In short, it earns cash from its core refining and chemicals business to fund a loss-making battery subsidiary, and in valuing the company, the value of the subsidiary stakes it holds is the key.
- The recent closing price is ₩99,000 and the market cap is ₩16.7 trillion.
- The price sits below its 20-day moving average (₩100,095) and below its 60-day average (₩116,765).
- Trading below both its short- and medium-term moving averages, the trend is on the soft side.
- The RSI (a supporting gauge that scores the strength of gains versus losses over the past 14 days on a 0-100 scale) is 45.4, a neutral level.
- The one-month change is -4.5%, the three-month change is -18.7%, and the position relative to the 52-week high is -33.9%.
- Relative strength versus KOSPI is 22 (on a 1-99 scale that weights recent returns against the index over the past year more heavily; higher means stronger than the market).
- That places it near the top 79% of all stocks by strength.
- Over the past three months it lagged the index by 33.8%.
- It is best to read the chart alongside trading volume and the dates of disclosures.
- The metrics alone are confusing.
- With a 2025 net loss of -₩3.35 trillion, the P/E (how many times a year's earnings the price is worth) cannot be calculated and EPS is also negative.
- By contrast, the P/B (how many times the book value of net assets the price is worth) is 0.77x, below 1x.
- Even so, the P/B figure for this company cannot be taken at face value.
- Book equity carries core stakes such as the wholly owned SK On at low historical acquisition cost, so equity looks small relative to actual holding value, which tends to make the P/B appear higher than it really is.
- The financial burden is clear: a debt ratio (debt relative to equity) of 317.6% and an interest coverage ratio (how many times operating profit covers interest) of 0.07, as debt rose sharply through battery investment and mergers.
- That is why it is hard to declare it cheap or expensive by applying last year's P/E and P/B directly; as a stock that has just passed an earnings inflection, it should be viewed by this year's trend.
- Revenue recovered to ₩80.3 trillion in 2025, up 8.1% from the prior year, but operating profit bent sharply lower (₩1.88T in 2023 → ₩0.36T in 2024 → ₩0.45T in 2025), and net profit was a loss two years running (-₩2.26T, -₩3.35T in 2024 and 2025).
- This was the result of battery losses and asset impairments consuming core-business profit.
- The change came in Q1 2026.
- Revenue of ₩24.2 trillion (+15.2% year on year) and operating profit of ₩2.16 trillion rebounded sharply, up 634% from the prior quarter, turning back to profit.
- That said, about ₩1 trillion of this profit was inventory and lagging gains that arose as cheaply sourced crude flowed into costs with a lag amid a spike in oil prices, with about ₩776.0 billion of it coming from the refining segment alone.
- The core business's 'normalized profit' is lower than this.
- Batteries (SK On) narrowed the operating loss to ₩349.2 billion in Q1, with the U.S. production tax credit (AMPC) adding about ₩97.0 billion.
- Thus this year's profit hinges on the core refining margin and the pace of narrowing the battery loss; even stripping out inventory gains, the picture is a turn from last year's loss to a profit footing.
- Recent disclosures center on funding support for subsidiaries.
- Around May 21, a run of participation in a subsidiary rights issue and decisions on debt guarantees and loans to another party (a subsidiary) followed, work that props up the finances of the battery subsidiary SK On.
- On May 28-29 came the Q1 quarterly report and disclosures related to acquiring shares in another company.
- In the bigger picture, the company absorbed SK E&S in November 2024 to take in the LNG and power business, in November 2025 merged the lubricants subsidiary SK Enmove into the battery subsidiary SK On to bolster SK On's capital and cash flow (EBITDA), and decided to buy all SK On convertible preferred shares held by financial investors for about ₩3.59 trillion.
- Stabilizing the finances of loss-making businesses and simplifying governance have been the consistent direction of the past year or two.
- The strong and weak conditions split clearly.
- The strengths are that the core refining and chemicals business has turned back to a profit footing; the P/B of 0.69x (and, since subsidiary stakes are carried low on the books, an actual net asset value that is even larger) leaves the price depressed versus asset value; and the battery loss is shrinking each quarter.
- The weaknesses are that a large share of Q1 profit came from inventory gains tied to oil-price swings and does not simply repeat; that the financial burden is heavy, with a 317% debt ratio and a 0.07 interest coverage ratio; and that until the battery business (SK On) stands on its own with a profit, the parent must keep supplying funds.
- In sum, 'if oil and refining margins hold up and the SK On loss shrinks quickly,' the undervaluation versus asset value comes into focus, while 'if oil prices fall and the battery loss drags on,' the financial burden comes back to the fore.
- That is why, for this company, it is right to look through the lens of the net asset value (NAV) of the subsidiary stakes it holds, not a simple P/E.
🔎 Valuation vs peers Undervalued
Compared against a refining and chemicals core peer set, while also viewing the net asset value (NAV) of the subsidiary stakes it holds, given its operating-holding character.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| S-Oil | 84.94x | 1.69x | 1.99% |
| Lotte Chemical | 0.00x | 0.21x | -16.19% |
The refining core is compared with S-Oil and chemicals with Lotte Chemical, but because SK Innovation is an operating holding company that also encompasses batteries, LNG, and lubricants, it is hard to measure with a single multiple. Last year's loss makes P/E meaningless, and on a forward basis that accounts for this year's profit footing, this is a phase in which earnings are normalizing quickly relative to market cap. The key is the net asset value (NAV) of the subsidiary stakes: on top of the 0.69x P/B, wholly owned subsidiaries such as SK On and SK Innovation E&S are carried on the books at low acquisition cost, so the price is even more depressed relative to actual net asset value. Even placing the clear discount factors of the financial burden and the battery loss alongside this, on an asset-value basis it reads as undervalued territory.
Price history Close · MA20 · MA60
The latest close is ₩99,000 and the market capitalization is ₩16.7 trillion. The price sits below its 20-day moving average (₩100,095) and below its 60-day moving average (₩116,765). It is under both its short- and medium-term moving averages, so the trend looks subdued. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 45.4, a neutral level. The one-month change is -4.5%, the three-month change is -18.7%, and the position relative to the 52-week high is -33.9%. Relative strength versus the KOSPI is 22 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 21% of all stocks. Over the past three months it lagged the index by 33.8%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -33.78% / 6M -42.04% / 12M -64.54%
Key metrics vs whole-market median
Valuation
A net loss makes the P/E an unreliable valuation gauge. The P/B of 0.77x is below the whole-market median (1.15x).
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Profitability & financials
Return on equity (ROE) is -15.4%, below the whole-market average (5.0%). The operating margin is 0.6%. The debt ratio is 317.6%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $50.9B | $49.2B | $53.2B | +8.11% ↑ faster |
| Operating profit | $1.2B | $235.7M | $297.4M | +26.14% ↑ faster |
| Net profit | $169.8M | -$1.5B | -$2.2B | — |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $31.1B | $51.7B | $50.9B | $49.2B | $53.2B |
| Operating profit | $1.2B | $2.6B | $1.2B | $235.7M | $297.4M |
| Net profit | $323.8M | $1.3B | $169.8M | -$1.5B | -$2.2B |
| Revenue CAGR | 4-yr avg 14.42% | ||||
Revenue rose 8.1% year over year (2023 ₩76.8 trillion → 2024 ₩74.3 trillion → 2025 ₩80.3 trillion), and the three-year trend is 'mixed'. The pace of growth also quickened from the prior year. Operating profit rose 26.1% year over year. Profit is growing at an accelerating pace. Over the 5 years on record, revenue compound annual growth (CAGR) is 14.4%. The two-year revenue CAGR is 2.3%. In the most recent quarter (Q1 2026), revenue was 15.2% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- —
Points to watch
- Debt far exceeds equity (debt ratio 317.6%).
- Operating profit barely covers the interest bill (interest coverage below 1x).
- The most recent full year was a loss, so it is worth checking whether profitability recovers.
Recent news & events searched · sourced
- 2026-05-29FilingQ1 2026 quarterly report filed. Revenue of ₩24.2 trillion, operating profit of ₩2.16 trillion, turning to a profit (operating profit includes about ₩1 trillion of inventory and lagging gains).Short term: confirms improved core refining margins and a narrower battery loss in the numbers. But with a large share from inventory gains, caution is warranted on sustainability. Source
- 2026-05-28FilingDecision to acquire shares and investment securities of another company (a key management matter of a subsidiary). Adjustments related to battery and energy subsidiary stakes and investments.Medium term: an extension of the trend of simplifying subsidiary governance and bolstering finances, which affects the value of holdings given the holding structure. Source
- 2026-05-21UpdateDecision to participate in a subsidiary rights issue and to provide debt guarantees and loans to another party (a subsidiary). The parent supports the finances of the battery subsidiary SK On.Short term: injecting funds into a loss-making subsidiary enlarges the parent's debt and guarantee burden, a financial risk factor. Medium term: the burden eases once SK On stands on its own. Source
- 2025-11-01FilingDecision to merge the lubricants subsidiary SK Enmove into the battery subsidiary SK On, and to buy all SK On convertible preferred shares held by financial investors for about ₩3.59 trillion.Medium term: bolsters SK On's capital (about ₩1.7T) and EBITDA (about ₩0.8T) and simplifies governance. Short term: a cash outflow and a debt burden. Source
Figure cross-check computed ↔ external
Recent filings
- 2026-05-29Large-business-group status disclosure
- 2026-05-28Amended filing
- 2026-05-28Amended filing
- 2026-05-22Corporate governance report
- 2026-05-21Amended filing
- 2026-05-21Amended filing
- 2026-05-21Amended filing
- 2026-05-21Amended filing
- 2026-05-21Amended filing
- 2026-05-15Disclosure
- 2026-05-15Disclosure
- 2026-05-15Disclosure
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.