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Photo: OCI |
[Alpha Biz= Ellie Kim] Korea Investment & Securities has named OCI as its top pick in the refining and petrochemical sector, maintaining a “Buy” rating and a target price of 140,000 won.
The brokerage expects improving profitability amid rising oil prices, as geopolitical tensions involving the United States, Israel, and Iran heighten the likelihood of crude prices exceeding $100 per barrel.
Analyst Lee Chung-jae noted that while refining and petrochemical margins weakened in May due to expectations of a ceasefire, profitability has been recovering rapidly in June. He added that the recent escalation between Iran and Israel suggests a low probability of a near-term peace agreement, supporting a renewed upward trend in oil prices.
The report also highlighted that prolonged disruptions to refining and petrochemical operations in Asia could further tighten supply. As a result, prices of OCI’s key products, including BTX and TDI, are expected to rise alongside crude oil.
In addition, higher prices for coal tar pitch and carbon black in China during the second quarter compared to the first quarter are expected to support margin improvement.
On the semiconductor materials side, OCI’s polysilicon business is projected to benefit from capacity expansions by key customers. The company has been supplying semiconductor-grade polysilicon to SK Siltron since 2012, and plans by the SK Group to double wafer production over the next five years are seen as a positive factor for its basic chemicals segment.
The brokerage forecasts OCI to post revenue of 2.3 trillion won and operating profit of 180 billion won in 2026, marking a significant improvement from 2025. It reiterated its view that OCI stands out as a preferred investment amid rising geopolitical uncertainty in the Middle East.
OCI shares closed at 106,900 won in the previous session.
Alphabiz Ellie Kim 인턴기자(press@alphabiz.co.kr)
