[Special Stock] "Low PBR and Shareholder Returns Alignment" Regional Heating Corporation Hits Intraday Upper Limit

The stock price of Jiyeok Nanbang Gongsa is strong following news that 'enhancing shareholder value' will be included as a detailed item in the management evaluation of listed public enterprises. As of 9:35 AM on the 19th, Jiyeok Nanbang Gongsa is trading at 41,500 KRW, up 8,150 KRW (24.44%) from the previous trading day. At one point during the session, it even hit the upper price limit.

On the same day, researcher Hwang Seong-hyun from Eugene Investment & Securities upgraded the investment opinion on Jiyeok Nanbang Gongsa to 'Strong Buy (STRONG BUY).' The target price was also raised to 57,000 KRW.

According to recent media reports, the government will add an item for 'enhancing shareholder value of listed public enterprises' to the detailed evaluation criteria for public institution management evaluations starting this year. This includes the appropriateness of dividend levels and protection of minority shareholders. Researcher Hwang said, "Considering Jiyeok Nanbang Gongsa's past dividend payout ratio, the estimated dividend per share for this year is 2,600 KRW. This aligns with the low PBR (price-to-book ratio) and shareholder return aspects."

He added, "Due to the previously slow rate increases and the impact of the Russia-Ukraine war, costs increased, resulting in a cumulative loss of 600 billion KRW from 2022 through last year. There are plans to recover these cumulative losses from this year through 2026." He continued, "The overall cost was raised by 7% in the first half of last year, and further rate increases are expected this year. Given that small heating companies are facing bankruptcy risks due to rate issues, the justification for this is sufficient."