[Click eStock] "Gas Corporation, Disappointing Speed in Accounts Receivable Collection"

On the 25th, LS Securities analyzed that the speed of recovering the nearly 15 trillion won in outstanding receivables from Korea Gas Corporation is disappointing, and it is necessary to watch the dividend decision at the end of February. The investment opinion 'Buy' and the target stock price of 50,000 won were maintained.

Based on Korea Gas Corporation's consolidated financial statements, the fourth-quarter sales recorded 9.979 trillion won, and operating profit was 1.1763 trillion won. The operating profit was an 'earnings surprise,' soaring 122% compared to the same period last year. However, excluding 100 billion won in operating profit from major overseas business sites, most of the increase was due to one-time factors such as a reduction in losses from gas fee discounts for vulnerable groups.

Thanks to these one-time factors in the fourth quarter, the annual operating profit last year also increased by 93% year-on-year to 3.0034 trillion won. LS Securities forecasts that this year's operating profit will decrease by 20% compared to last year, to 2.4086 trillion won.

The speed of recovering outstanding receivables is important for dividends, which have a significant impact on Korea Gas Corporation's stock price trend. At the end of last year, total outstanding receivables amounted to 14.7857 trillion won. The largest portion, outstanding receivables for city gas for residential use, continues to incur interest costs of around 150 billion won per quarter.

Analyst Seonghwa Sung, who reflected the assumption of dividends in the estimates, stated, "The speed of recovering outstanding receivables is slow, and it is uncertain what stance the government will take," adding, "For now, it is necessary to watch the decision of the Ministry of Economy and Finance's dividend consultation body at the end of February."

He also added, "It is regrettable that the core investment point of 'entering the full recovery phase of residential outstanding receivables through additional fee increases and resuming dividends through this' has somewhat faded due to political turmoil, but it is positive that the Donghae gas field (Daewang Whale) issue has largely been settled, freeing the stock from extreme volatility as a theme stock."