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(Photo = SK gas) |
[Alpha Biz= Reporter Kim Jisun] Hana Securities has raised its target price for SK Gas to 220,000 won, a 10% increase from the previous target of 200,000 won, while maintaining a "Buy" rating. This adjustment is based on expectations of increased long-term profits, driven by the anticipated commercial operation of a new LNG/LPG combined-cycle power plant by the end of the year.
In a report titled "The Fourth Quarter Will Be Crucial," Hana Securities highlighted that the new power plant is expected to contribute positively to SK Gas's financial performance, enhancing its profitability and dividend per share (DPS) growth in the mid-to-long term.
For the second quarter of this year, Hana Securities forecasts a 26.9% decrease in operating profit to 48.8 billion won, with sales increasing by 6.9% to 1.6 trillion won. Operating profit is expected to fall short of market expectations.
The firm noted that while LPG prices have risen compared to the previous year, and sales are expected to be stable, demand from industrial sectors may slightly weaken. However, this will be offset by increased volumes for petrochemical purposes. Hana Securities also anticipates that the impact from trading profits and derivative-related gains or losses will be minimal.
Pre-tax profit is projected to rise by 294.0% to 47.5 billion won, benefiting from improved derivative valuation due to higher LPG prices compared to the previous quarter. However, challenges persist due to weak PDH (propane dehydrogenation) market conditions and issues with investment costs for private coal-fired power plants.
As of the latest trading, SK Gas shares closed at 177,900 won, down 1.22% from the previous trading day, with a high of 181,700 won and a low of 177,900 won.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
