S-Oil Corp: Guiding stronger Group III lubricant spreads and higher utilizations in 2H

Research evidence excerpt

S-Oil Corp: Guiding stronger Group III lubricant spreads and higher utilizations in 2H

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

03 August 2026

S-Oil Corp Overweight

010950.KS, 010950 KS

Guiding stronger Group III lubricant spreads and higher Price (03 Aug 26):W120,500

utilizations in 2H Price Target (Jun-27):W165,000

S-Oil’s 2Q OP of W965bn beat Bloomberg consensus of W948bn, but slightly Head of Asia Energy & Chemicals |

missed JPMe of W1.07trn due to weaker-than-expected core refining earnings – Asia EV Battery

likely due to domestic fuel price caps that we estimate caused domestic refining Parsley Ong AC

losses in April-May. Management continued to expect government compensation (65) 6882-8578

in 4Q, but did not provide guidance on the dollar amount (see Korea Energy: 2Q parsley.rh.ong@jpmorgan.com

likely to beat on lubricants, with W4.2trn refiner compensation fund a 4Q tailwind J.P.J.P. MorganMorgan SecuritiesSecurities Singapore(Asia Pacific)PrivateLimited/Limited/J.P.

– 12 July 2026). We do not embed government compensation in our earnings Morgan Broking (Hong Kong) Limited

estimates. We note that S-Oil delivered ~W532bn refining OP in 2Q, despite Michelle Wong

operating at only 76% utilization due to scheduled maintenance – we expect a (852) 2800 8556

return to 100% utilization in 2H. With Group 3 lubricant spreads trending even michelle.wong@jpmorgan.com

J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

higher in 3QTD, we expect upward revisions to consensus 2H OP of W1.3trn Morgan Broking (Hong Kong) Limited

(JPMe W1.8trn). Our APAC refining pecking order is SK Innovation (OW) & TOP Vicky Hsia

(OW) > S-Oil (OW) & FPCC (OW) > Sinopec/Hengli/Rongsheng (N). (852) 2800 3752

vicky.hsia@jpmorgan.com

Morgan Broking (Hong Kong) Limited

Key positives