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THE INVESTOR
July 17, 2018
Big Reunion

Stocks & Bonds

[EQUITIES] ‘GS Caltex’s new investment may burden industry’

  • PUBLISHED :November 16, 2017 - 10:31
  • UPDATED :November 16, 2017 - 10:31
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[THE INVESTOR]


The oil and petrochemical industry will gain from improving margins since the oil price drop in 2014 and “overweight” recommendation still hold but aggressive investment in the industry should be refrained, cautioned analyst Son Yeong-ju. 

GS Caltex’s two-year expansion plan showed that the weak oil prices not only has improved margins but also could result in facilities expansion in pursuit of more profits, noted the analyst. As oil developers might expand their business too, value of the industry as a whole would have less room to rise, she added.

By Hwang You-mee (glamazon@heraldcorp.com)

GS Caltex recently announced a 2-trillion won (US$1.81 billion) plan to build naphtha cracking center and polyethylene facilities, and its peer companies could follow suit, burdening the industry, said Kyobo Securities on Nov. 16. 

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