[Click eStock] "Koramco Energy REITs, Dividend Expansion Expected Through Asset Sales"

Samsung Securities Report

[Asia Economy Reporter Minji Lee] Samsung Securities evaluated that the completion of the sale of five assets by Koramco Energy REIT is expected to enhance shareholder value. The investment opinion was maintained as Buy, and the target price was kept at 6,300 KRW.

Koramco Energy REIT has completed the sale of a total of five assets, including Hwajeong 2-ho, Bansong-daero, Yeonsan, Myeongil, and Seowon gas stations. The Doknipmun gas station is currently undergoing disposal (expropriation) due to redevelopment. Among these, the disposal profit dividends from the Hwajeong 2-ho and Bansong-daero assets, which were sold by November, are planned to be resolved and paid in the 5th term, while the disposal profit dividends from the remaining assets will be executed from the 6th term. The total disposal profit dividend for the 5th term is 2.2 billion KRW, with a special dividend of 25 KRW per share, and the total dividend per share is 170 KRW. The approximately 24 billion KRW of sale principal to be recovered through the disposal of the five assets is expected to be used for debt repayment or capital investment to add value to existing assets.

Researcher Kyungja Lee of Samsung Securities stated, “There are a total of 13 remaining assets under sale, and although asset transactions have significantly decreased recently due to tightening in the borrowing market, a considerable number of transactions are expected to be completed by 2023.”

At the Yeonsan gas station, where the balance will be fully paid in the 6th term, disposal profit dividends of over 10 billion KRW are estimated to be possible. The expected disposal profit dividend per share is 206 KRW. Researcher Lee evaluated, “Despite the high-interest-rate environment and uncertain macroeconomic conditions, there is abundant dividend resource to enhance dividend stability.”

This sale is expected to provide strong cash flow to shareholders in the short term. Furthermore, by successfully selling at a premium of over 20%, the net asset value of the portfolio can be verified, and portfolio rebalancing and strengthening of financial soundness through the sale of non-core assets are also expected. Researcher Lee analyzed, “These positive factors for shareholder value will serve as a good model for other REITs seeking strategies to enhance shareholder value.”