[Click eStock] Korea Gas Corporation Strengthens Growth Potential Through Expansion of Hydrogen and New Businesses

Kiwoom Securities Report
Target Price Up 21%

[Asia Economy Reporter Minji Lee] Kiwoom Securities maintained a buy rating on Korea Gas Corporation on the 28th and raised the target price by 21% to 51,000 KRW. This decision was based on the judgment that growth potential has been secured through the announcement of its transition to a hydrogen platform business amid a favorable operating environment.

Korea Gas Corporation announced its Vision 2030, a strategy for hydrogen and new business promotion, declaring a major transformation from an existing natural gas wholesale operator to Korea's representative hydrogen platform business. The promotion strategies include △production and import of overseas green hydrogen △supply of 830,000 tons of hydrogen annually by 2030 through hydrogen production infrastructure △construction of 152 hydrogen charging stations △installation of 1 gigawatt of distributed fuel cells, and establishment of a carbon-neutral hydrogen mega-station platform.

The mid- to long-term hydrogen industry production and import volumes are planned to expand to 100,000 tons in 2025, 200,000 tons in 2030, and 1.21 million tons in 2040, aiming to achieve green hydrogen sales revenue of 4.52 trillion KRW by 2040. Researcher Jonghyung Lee of Kiwoom Securities stated, “The company plans to build infrastructure to produce and supply 835,000 tons of hydrogen annually, targeting hydrogen charging stations and hydrogen fuel cells, positioning itself as the largest domestic supplier of hydrogen for transportation and power generation.”

Additionally, the company plans to simultaneously expand new businesses linked to existing LNG operations, such as LNG bunkering, cold chain clusters, and GAS to Power, separately from the hydrogen business.

The company declared Vision 2030 and achieved an operating profit of 3 trillion KRW. This is about three times the estimated operating profit of 1.1 trillion KRW for this year. Although the company did not specify details, it is estimated that the gas wholesale business accounts for 1 trillion KRW, overseas business 1 trillion KRW, and hydrogen and new businesses 1 trillion KRW. Researcher Jonghyung Lee explained, “It is somewhat disappointing that detailed investment plans and mid- to long-term performance forecasts by business segment were not disclosed in the Vision 2030 announcement, but these are expected to be announced later with some time lag.”

He added, “With the recent rise in oil and natural gas prices, a favorable operating environment continues for both the domestic gas wholesale business and overseas resource development business, and the Vision 2030 announcement is judged to have strengthened mid- to long-term growth potential.”