South Korea’s largest refiner SK Innovation Co. drew 132.5 billion won ($11.5.9 million) net buying so far this year from foreign investor as its safe product mix and generous dividend policy added appeal to the stock on top of oil market recovery.

The company draws 48 percent of income from petroleum-related products, 40 percent from chemical division and 12 percent from batteries and lubricants. It kept up profit regardless of oil market volatility because it draws steady income from chemical business.

It has not made any loss in the chemical segment so far. While its mainstay petroleum division incurred nearly 1 trillion won losses in 2014 after oil prices tumbled to $40 from $100, its chemical business earned 359.2 billion won. Operating profit as of third quarter last year reached 742.4 billion won.

The core moneymaker has been paraxylene (PX) - chemical essential used to produce plastic bottles. It is unrivalled in its annual production capacity of 2.6 million tons, compared to local rivals S-Oil Corp.’s 1.8 million tons and Hanwha Petrochemical Co.’s 1.7 million tons. PX margin, the price difference between the refined output and raw material naphtha, has been steadily rising from $367 per ton last December to $420 this month.

SK Innovation also stayed unhurt by the Chinese risk from its economic retaliation for deployment of a U.S. antimissile system in Korea. Wuhan Ethylene was set up in 2013 by SK Global Chemical and state firm Sinopec at 35:65 ratio. It has 1,000 Chinese employees and generated profit of 400 million won each last year and in 2015. The factory after two-month repair is ready to run at full capacity due to shortage of supplies in China. Profit this year is expected to be largest-ever despite shorter factory days.

SK Innovation posted 3.2 trillion won in operating profit last year and eyes similar number this year. Another appeal to the stock has been the company’s generous dividend policy.

Its dividend payout ratio reached 35.7 percent last year, standing out among its peers LG Chem Ltd. - 28.7 percent - and Lotte Chemical Co. - 7.5 percent.

SK Innovation shares closed Wednesday at 160,500 won, up 2.23 percent from the previous session in Seoul trading.

By Moon Il-ho

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]