More Room to Run

Research evidence excerpt

Not for redistribution without written consent of Morgan Stanley

M

Idea

August 11, 2026 11:47 AM GMT

Morgan Stanley & Co. International plc, Seoul Branch+

S-Oil | Asia Pacific

Young Suk Shin

Equity Analyst

More Room to Run

Chan Park

Equity Analyst

What’s Changed

S-Oil (010950.KS)

From

To

Price Target

W160,000

W190,000

The refining upcycle has more room to run, in our view. With

tight supply keeping margins higher for longer and policy upside

yet to be priced in, we see further earnings upgrades ahead.

Raise PT to W190k; stay OW.

S-Oil (010950.KS, 010950 KP)

S. Korea Energy & Materials | S. Korea

On the policy front, fuel price cap removal and potential loss reimbursement

Stock Rating

Industry View

Price target

Up/downside to price target (%)

Shr price, close (Aug 10, 2026)

52-Week Range

Sh out, dil, curr (mn)

Mkt cap, curr (bn)

EV, curr (bn)

Avg daily trading value (bn)

could provide incremental catalysts in 2H26.

Fiscal Year Ending

12/25 12/26e 12/27e 12/28e

With an improved earnings outlook, we also expect S-Oil's DPS to show notable

EPS (W)**

Prior EPS (W)**

EPS (W)§

Revenue, net (W bn)

ModelWare net inc (W

bn)

P/E

P/BV

ROE (%)

Div yld (%)

Leverage (EOP) (%)

1,572

1,179

34,247

124

Key Takeaways

Tight refining/lube supply should sustain elevated margins into 2H26, leaving

room for further earnings upgrades.

improvements after two years of minimal returns.

A key beneficiary of refining’s “Golden Age”: As highlighted in The Golden Age

Goes Global last week, MS’s global refining team remains constructive on the

industry outlook. We believe supply disruptions stemming from the Middle East

conflict, combined with years of underinvestment in refining capacity, are driving a

structurally higher mid-cycle margin environment—at a time when energy security

and reliable supply are becoming increasingly important globally. Against this

backdrop, we see S-Oil as a key beneficiary. Management’s commentary following

solid 2Q26 results reinforces our view, with supply tightness across both refining

75.2

1.1

1.4

2.1

61.8

Overweight

In-Line

W190,000

36

W139,600

W177,100-57,600

113

W15,717

W21,201

W49

23,251 15,550

8,998

19,663

9,447

8,085

20,547 15,919 14,429

…