SK E&S stocks closed at 80,900 won on May 24, marking a 114.57% surge from 37,750 won recorded a month earlier on April 24, according to Korea Exchange data. The rally was driven by expectations that renewable energy companies will benefit from surging power demand as artificial intelligence data centers expand. During the same one-month period, the KOSPI index fell 20.9%, underscoring SK E&S's outperformance. The stock's recent momentum accelerated further, climbing 44.90% over five trading days from May 20 to May 24, with institutional investors purchasing 106.8 billion won and foreign investors buying 79 billion won worth of shares. The government's June announcement of three mega-projects requiring 550 trillion won in investment for an 8.4GW AI data center, combined with corporate RE100 (100% renewable energy usage) commitments, has created a favorable business environment for renewable energy firms.
SK E&S Stock Price Surpasses Brokerage Target After One-Month Rally
SK E&S's stock price exceeded the highest target price set by securities firms. Hana Securities raised its target price for SK E&S to 66,000 won on May 16, a 10% increase from its previous target, representing the highest target price among brokerages. The stock surpassed this level within approximately one week. The sharp rise occurred as institutions bought 106.8 billion won and foreign investors purchased 79 billion won worth of shares during the five trading days from May 20 to May 24, when the stock climbed 44.90%.
Analysts Forecast Renewable Energy Demand Growth From AI Data Centers
Securities firms project SK E&S will continue its revenue expansion as renewable energy emerges as an alternative to meet surging electricity demand from data center growth. Park Se-ra, a researcher at Shinyoung Securities, stated that "in addition to the unprecedented increase in power demand triggered by artificial intelligence, the proportion of renewable energy use as eco-friendly energy will rise sharply." The government's renewable energy expansion policy and companies' RE100 implementation needs have combined to create favorable business conditions for renewable energy companies.
Government Announces 39.7GW Power Demand From Three Mega-Projects
The government announced its three mega-project policy in June, revealing plans to build an 8.4GW AI data center as the first phase, with investment reaching approximately 550 trillion won. The government forecasts the mega-projects will generate total additional power demand of 39.7GW, including 6.3GW for the southwestern semiconductor cluster, 15GW for the metropolitan semiconductor industry base, and 18.4GW for AI data centers. The government set a target to expand cumulative renewable energy installation capacity to 100GW by 2030 and increase the generation ratio to over 30% by 2035. Park stated that "since the mega-project announcement, the domestic renewable energy market is entering a demand expansion phase different from before," adding that "renewable energy will emerge as a power source with regulatory and commercial advantages in future large off-taker long-term power procurement."
SK and KKR Sign 2 Trillion Won Renewable Energy Joint Venture Contract
Collaboration with KKR, the world's largest private equity fund operator, represents an additional positive factor. SK and KKR signed a main contract to launch a renewable energy joint venture with a scale of approximately 2 trillion won. Cho Hye-bin, a researcher at Kyobo Securities, stated that "through the SK-KKR JV, the company's stature is expected to rise as Korea's largest renewable energy platform, and structured scale and large project execution are expected to expand." Yoo Jae-sun, a researcher at Hana Securities, noted that "although specific details have not been finalized, if the JV focuses on stably expanding renewable energy project operating revenue, SK E&S can concentrate on solar power purchase agreement development business," adding that "if existing capabilities are also unified, revenue growth will be possible even considering just development capacity."
Kyobo Securities Estimates Q2 Revenue at 258.2 Billion Won
According to Kyobo Securities, SK E&S's second-quarter revenue is estimated at 258.2 billion won, a 298% increase compared to the same period last year. Operating profit is expected to reach 14.4 billion won, representing 50% growth.
FAQ
What was SK E&S's stock price performance in the month ending May 24?
SK E&S stocks closed at 80,900 won on May 24, rising 114.57% from 37,750 won recorded on April 24, according to Korea Exchange data. During the same period, the KOSPI index fell 20.9%.
Why did SK E&S stocks surge in May?
The rally was driven by expectations that renewable energy companies will benefit from surging electricity demand as AI data centers expand. The government announced three mega-projects in June requiring 550 trillion won in investment for an 8.4GW AI data center, and corporate RE100 commitments created favorable conditions for renewable energy firms.
What are analysts' revenue forecasts for SK E&S in Q2?
Kyobo Securities estimates SK E&S's second-quarter revenue at 258.2 billion won, a 298% increase year-over-year, with operating profit expected to reach 14.4 billion won, representing 50% growth.
