[Featured Stock] Korea Gas Corporation Up 7% on Strong Q2 Performance and Tariff Hike Expectations

With solid performance in the second quarter this year and expectations for additional gas fee hikes to recover outstanding payments, the stock price of Korea Gas Corporation showed strength on the 12th. Several corporate reports from the securities industry raised their target prices.

As of 9:33 a.m. on the day, Korea Gas Corporation was trading at 44,300 KRW, up 2,900 KRW (7.00%) from the previous trading day.

In the second quarter, Korea Gas Corporation recorded sales of 7.5 trillion KRW and an operating profit of 465.7 billion KRW, marking a 7.8% decrease and a 127.1% increase respectively compared to the same period last year. With results exceeding market expectations, the possibility of achieving an annual profit has become clearer.

On the day, Hanwha Investment & Securities stated, "Korea Gas Corporation's second-quarter operating profit significantly exceeded market expectations. With the visibility of achieving an annual profit, expectations for the resumption of dividends will gradually increase," raising the target price to 57,000 KRW and maintaining a buy rating. Researcher Song Yurim of Hanwha Investment & Securities said, "Although the stock price level has risen compared to before due to the East Sea gas field development issue, considering that last year's stock price was excessively low, along with improved performance, reduction in outstanding payments, debt reduction, and the possibility of dividend resumption, the company's normalization is becoming visible. Considering this, the current stock price level is still not burdensome."

Samsung Securities also raised Korea Gas Corporation's target price by 36% from the previous level to 49,000 KRW and maintained a buy rating. Researcher Kim Youngho of Samsung Securities said, "The gas field development project is only at the stage of exploration drilling, but the recognition of the severe undervaluation that has continued for a considerable period is positive," adding, "The performance improvement trend due to the base effect is expected to continue in the second half of the year." He also mentioned, "The possibility of additional fee hikes to recover outstanding payments cannot be ruled out."

LS Securities also raised Korea Gas Corporation's target price by 18% to 45,000 KRW. Researcher Sung Jonghwa of LS Securities explained, "If factors for value adjustment occur, such as several more sequential fee hikes being announced in the future or a policy to re-pursue year-end dividends being announced, the target price could be adjusted upward." However, he added, "Due to the sharp rise in stock price driven by expectations for the gas field, the current stock price has limited room for growth compared to the target price, so the investment opinion is downgraded from buy to neutral (Hold)."