SK Innovation Battery overhang priced in; one of Asia’s most undervalued integrated energy platforms; initiate at OW

Research evidence excerpt

SK Innovation Battery overhang priced in; one of Asia’s most undervalued integrated energy platforms; initiate at OW

J P M O R G A N Asia Pacific Equity Research

14 May 2026

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Initiation

SK Innovation Overweight

096770.KS, 096770 KS

Battery overhang priced in; one of Asia’s most Price (14 May 26):W127,600

undervalued integrated energy platforms; initiate at OW Price Target (Jun-27):W165,000

We initiate coverage on SK Innovation (SKI) with an OW rating and a W165,000 Head of Asia Energy & Chemicals |

price target. In our view, the market remains anchored on the 2023-25 narrative Asia EV Battery

dominated by battery segment losses, a deteriorating balance sheet, and a weak Parsley Ong AC

refining/chemical business. While these concerns are valid, we believe much of the (65) 6882-8578

downside has been priced in. SKI’s 1Q26 result was a pleasant surprise, with battery parsley.rh.ong@jpmorgan.com

revenue up 23% q/q. We see the upcoming third Korea ESS tender (in June) as a J.P.J.P. MorganMorgan SecuritiesSecurities Singapore(Asia Pacific)PrivateLimited/Limited/J.P.

catalyst. Post-restructuring, we believe SKI is no longer a Korean refiner with a cash- Morgan Broking (Hong Kong) Limited

draining battery subsidiary, but increasingly an integrated Asian energy platform with Michelle Wong

a stabilized balance sheet. Our SOTP valuation cross-check attributes 44% of value (852) 2800 8556

in lube/LNG/E&P, 54% in refining/chems and 2% in battery/material.