SK Eteronics is experiencing a surge of over 9% in its stock price, driven by improved investment sentiment in the renewable energy sector due to rising global oil prices.
As of 1:45 PM on July 20, SK Eteronics shares were trading at 56,700 won, up 4,700 won (9.04%) from the previous trading day, according to the Korea Exchange.
The spike in oil prices is attributed to escalating military tensions between the U.S. and Iran, which has led to increased buying interest in renewable energy stocks. The rise in oil prices is expected to elevate the costs of fossil fuel power generation, highlighting the economic advantages of renewable energy sources such as solar and wind.
On the New York Mercantile Exchange (NYMEX), West Texas Intermediate (WTI) crude for August delivery closed at $82.49 per barrel, a 4.48% increase from the previous day. Brent crude for September delivery also rose by 4.59% to $88.10 per barrel. Concerns about potential disruptions to oil supply in the Middle East have grown as the U.S. and Iran expand their military targets to include critical infrastructure such as bridges, railroads, and power plants.
Analysts have a positive outlook on SK Eteronics' growth potential. On July 16, Yoo Jae-sun, a researcher at Hana Securities, raised the target price for SK Eteronics by 10% to 66,000 won while maintaining a 'buy' rating. Although short-term revenue from solar power purchase agreements (PPAs) is expected to be deferred into the third quarter, Yoo noted that if the company proves its capability to execute over 300 MW of solar PPA projects annually, earnings estimates could be revised upward.
Additionally, the government's consideration of measures to promote renewable energy purchase agreements (PPAs) is seen as a factor that could enhance long-term growth expectations. The industry anticipates that if the existing long-term contracts under the Renewable Portfolio Standard (RPS) shift to the PPA market, opportunities for solar development projects will expand.
* This article has been translated by AI.
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