SK Discovery Co Ltd

SK Discovery maintains a capital structure with a debt-to-equity ratio of 1.99, indicating a significant reliance on debt financing. The company's liquidity position is characterized by a current ratio of 1.57, suggesting it can cover its short-term obligations, but its operating cash flow is negative at -90,068,117,400 KRW, signaling potential cash flow constraints. Free cash flow is also negative at -182,327,288,480 KRW, further highlighting the company's cash outflows exceeding its operating cash inflows.

Profitability metrics for SK Discovery are weak, with a return on equity of 0.0042 and a return on assets of 0.0009, both significantly below industry norms for energy firms. The company's gross profit of 256,036,780,010 KRW and operating income of 46,510,136,930 KRW reflect modest profitability in a capital-intensive industry. The price-to-book ratio of 0.3 and price-to-tangible-book ratio of 0.3 suggest the company's market value is well below its book value, indicating potential undervaluation or asset impairment.

SK Discovery's revenue is concentrated in the oil and gas refining and marketing segment, with no disclosed geographic diversification in the provided data. The company's exposure to a single business line increases its vulnerability to sector-specific risks, such as commodity price volatility and regulatory changes.

The company's growth trajectory is uncertain, with no disclosed revenue growth or decline in the outlook data. However, capital expenditures of -487,452,062,340 KRW indicate ongoing investment in infrastructure, which may support future capacity or efficiency improvements. The absence of a clear growth narrative is compounded by the company's weak profitability and liquidity metrics.

Risk factors for SK Discovery include a medium liquidity risk, as highlighted by the negative net cash position after subtracting total debt. The company's debt load of 5,841,474,042,930 KRW and low dilution risk suggest a stable capital structure, but the potential for future dilution remains a concern if the company issues additional shares to fund operations or reduce debt. The risk assessment also notes a key flag of negative net cash, which could limit the company's ability to respond to financial stress.

Recent events for SK Discovery include the latest actual revenue of 6,939,172,190,000 KRW, as reported by analysts. No additional filings or transcripts are provided in the input data to further contextualize recent developments.

SK Discovery Co Ltd (006120.KS) has been formally classified within the Energy sector, specifically under Oil & Gas activities, marking a significant update to its corporate taxonomy. This reclassification provides a clearer framework for understanding the company's operational focus and aligns its profile with industry-specific benchmarks. The change is categorized as medium severity, reflecting its importance in defining the firm's strategic positioning within the broader market landscape. Alongside the sectoral update, the company's risk profile has been refined with new assessments for dilution and liquidity. Dilution risk is now rated as low, suggesting that the potential for shareholder equity erosion through new share issuance is currently minimal. This assessment offers investors a degree of confidence regarding the stability of their ownership stakes, a key consideration for long-term holders. Conversely, liquidity risk has been assessed at a medium level. This indicates that while the company is not facing immediate distress, there are moderate considerations regarding the ease of trading its shares or accessing short-term capital. Investors should monitor this metric closely, as liquidity conditions can impact price volatility and the ability to execute large trades without significant market impact. The analysis is supported by five analysts covering the stock, providing a baseline of professional scrutiny despite the absence of reported top holders or index memberships in the current dataset. These updates, drawn from financial and estimate data sources, collectively enhance the transparency of SK Discovery's operational and financial characteristics, allowing for more informed investment decisions.

Revenue grew 12.4% year-over-year to 10.16 trillion KRW in fiscal 2019, demonstrating consistent top-line expansion.

Net income surged 254.7% year-over-year to 129.3 billion KRW in fiscal 2019, indicating significant profitability recovery.

Operating income increased 61.8% year-over-year to 308.9 billion KRW in fiscal 2019, reflecting improved core operational efficiency.

Free cash flow improved 48.7% year-over-year to negative 248.7 billion KRW, showing a reduction in cash burn rate.

Gross profit reached 1.34 trillion KRW in fiscal 2019, maintaining a substantial buffer above operating expenses.

The debt-to-equity ratio of 1.99 is significantly higher than the cohort median of 0.36, indicating excessive leverage.

Return on equity of 0.42% falls in the bottom quartile of the cohort, signaling poor capital efficiency.

The company faces high credit risk according to risk flags, potentially impacting borrowing costs and financial stability.

Net margin of 0.58% is well below the cohort median of 2.2%, highlighting thin profitability relative to peers.

Revenue KRW 2.60T, +18,8% YoY; Operating income +445,1% YoY.

• ▍Revenue KRW 2.60T, +18,8% YoY
• ▍Operating income +445,1% YoY
• ▍Net income −65,0% YoY
• ▍Free cash flow +74,5% YoY
• ▍Net margin 0.5%

Revenue KRW 2.50T, +17,9% YoY; Operating income +89,0% YoY.

• ▍Revenue KRW 2.50T, +17,9% YoY
• ▍Operating income +89,0% YoY
• ▍Net income +38,2% YoY
• ▍Free cash flow +67,4% YoY
• ▍Net margin 0.7%

Revenue KRW 2.41T; Operating income KRW 110.69B.

• ▍Revenue KRW 2.41T
• ▍Operating income KRW 110.69B
• ▍Net margin 1.9%

Revenue KRW 2.57T; Operating income KRW 83.52B.

• ▍Revenue KRW 2.57T
• ▍Operating income KRW 83.52B
• ▍Net margin -0.1%

Revenue KRW 2.19T; Operating income KRW 21.37B.

• ▍Revenue KRW 2.19T
• ▍Operating income KRW 21.37B
• ▍Net margin 1.7%

Revenue KRW 2.12T; Operating income KRW 46.51B.

• ▍Revenue KRW 2.12T
• ▍Operating income KRW 46.51B
• ▍Net margin 0.6%

Revenue KRW 10.16T, +12,4% YoY; Operating income +61,8% YoY.

• ▍Revenue KRW 10.16T, +12,4% YoY
• ▍Operating income +61,8% YoY
• ▍Net income +254,7% YoY
• ▍Free cash flow +48,7% YoY
• ▍Net margin 1.3%

Revenue KRW 9.04T, +1,1% YoY; Operating income −23,7% YoY.

• ▍Revenue KRW 9.04T, +1,1% YoY
• ▍Operating income −23,7% YoY
• ▍Net income −80,9% YoY
• ▍Free cash flow −5,3% YoY
• ▍Net margin 0.4%

Revenue KRW 8.94T, +2,5% YoY; Operating income −45,9% YoY.

• ▍Revenue KRW 8.94T, +2,5% YoY
• ▍Operating income −45,9% YoY
• ▍Net income −55,3% YoY
• ▍Free cash flow −13 817,4% YoY
• ▍Net margin 2.1%

Revenue KRW 8.72T, +31,8% YoY; Operating income +532,8% YoY.

• ▍Revenue KRW 8.72T, +31,8% YoY
• ▍Operating income +532,8% YoY
• ▍Net income +100,8% YoY
• ▍Free cash flow −97,3% YoY
• ▍Net margin 4.9%

Revenue KRW 6.61T; Operating income KRW 73.05B.

• ▍Revenue KRW 6.61T
• ▍Operating income KRW 73.05B
• ▍Net margin 3.2%