SK Eternix Extends Rally Amid KOSPI Decline on Solar Policy Hopes

SK Eternix (475150), which hit the daily price limit the previous day, is posting gains for the second consecutive session. The stock is attracting investor interest on expectations for the government's large-scale renewable energy deployment policy, even as the KOSPI index declines.

According to the Korea Exchange on the 13th, SK Eternix was trading at 39,650 won as of 10:15 a.m., up 6.16% from the previous day. While the broader market showed weakness with KOSPI opening down more than 3%, SK Eternix maintained its upward momentum following the previous session. The stock closed at 37,350 won in the prior trading day, up 29.91%.

SK Eternix, an SK Group affiliate specializing in renewable energy, holds a high market share in wind power, solar power, and energy storage systems (ESS). The stock's recent strength is attributed to expectations for improved earnings driven by the government's renewable energy expansion policy.

DS Investment & Securities recently raised its target price for SK Eternix to 43,000 won. The brokerage forecasts revenue and operating profit to grow 38.8% and 28.3% year-over-year, respectively, in 2024. It noted the government's push to reform the Renewable Portfolio Standard (RPS) system, predicting a favorable business environment for companies like SK Eternix that can supply and sell renewable energy power.

"The domestic solar market, which has remained at 3GW annually, will expand significantly to 5-6GW starting next year, benefiting a small number of companies including SK Eternix," said Ahn Joo-won, analyst at DS Investment & Securities. "Setback distance regulations have been eliminated to expand solar deployment, and grid expansion plans—which had been the biggest obstacle to deployment—are now being established simultaneously, increasing the feasibility."

SK Eternix's largest shareholder is set to change from SK Discovery to global private equity firm Kohlberg Kravis Roberts (KKR). SK Discovery and financial investor Hahn & Company recently announced they would sell their entire stake in SK Eternix to KKR for approximately 350 billion won.