In a remarkable turn of events, shares of SK Eternix, the renewable energy division of South Korea’s SK Group, have experienced a dramatic rise, more than doubling in value over the past month. The surge, exceeding 114%, has been largely fueled by investor anticipation that the burgeoning infrastructure for artificial intelligence (AI) will necessitate a substantial increase in renewable energy demand. As of the market close on Friday, the company’s stock was valued at 80,900 won, equivalent to US$55.35, marking a 114.6% gain from its price a month ago.
This significant rise stands in stark contrast to the broader market trends during the same period. The Kospi index, South Korea’s main benchmark, saw a decline of 20.9%, while SK Group’s leading semiconductor subsidiary, SK hynix, experienced a 31.2% drop in its share value. The momentum for SK Eternix’s stock has particularly intensified over the past week, with the company seeing an impressive 44.9% increase in its stock price over the last five trading days. This surge has been supported by institutional investors acquiring a net total of 106.8 billion won in shares, alongside foreign investors who bought a net 79 billion won.
Analysts have attributed this robust performance to the forecasted rise in long-term demand for renewable energy, driven by AI data centers that require vast amounts of electricity. Adding to this optimism is the South Korean government’s persistent push to enhance clean energy capacity, further boosting investor confidence. In June, the government projected that key industrial projects, such as AI data centers and semiconductor manufacturing hubs, would create an additional demand for 39.7 gigawatts of electricity. It has also reiterated its commitment to increasing the nation’s renewable energy capacity to 100 gigawatts by the year 2030.
Further bolstering investor sentiment is SK Eternix’s planned renewable energy joint venture with KKR, a global private equity firm, valued at 2 trillion won. This collaboration is anticipated to significantly propel SK Eternix’s expansion in the clean energy arena. This strategic partnership is seen as a critical move to cement the company’s position in the rapidly evolving renewable energy sector, aligning with broader global trends towards sustainable energy solutions.
