[Click eStock] "SK Gas to Strengthen Earnings Stability Through Asset Liquidation and Restructuring... Target Price Up"

On November 21, Meritz Securities analyzed that "the sale of a minority stake in Ulsan GPS and the restructuring of SK Advanced could further strengthen the stability of SK Gas's earnings." Accordingly, the firm maintained its 'Buy' investment rating and raised its target price by 14% to 3.2 million won.

SK Gas is expected to achieve a record-high annual consolidated operating profit of 548.4 billion won this year, representing a 91.0% increase compared to the same period last year. In particular, Ulsan GPS, which began full-scale operations this year, is projected to generate 194.2 billion won in operating profit (operating profit margin of 23.0%), surpassing market expectations.

Next year, attention will be focused on the restructuring of affiliates and the reinforcement of earnings stability. The restructuring of subsidiaries and affiliates is analyzed as a potential short-term trigger for a stock price increase. Moon Kyungwon, a researcher at Meritz Securities, stated, "Ulsan GPS, which is in the process of selling a minority stake, has recently shown high profitability, and since the facilities are not yet outdated, a high sale price can be expected." He added, "As the government is leading the restructuring of the petrochemical industry, restructuring at SK Advanced can also be anticipated."

The expansion of trading from LPG to LNG was also evaluated positively. SK Gas began supplying LNG in 2024 as Ulsan GPS (1.2GW) commenced operations, and SK Chemicals' subsidiary MU will begin operating a new 300MW power plant this month, with SK Gas responsible for LNG supply to this facility as well. In addition, the company plans to continuously increase LNG supply through equity investments in domestic LNG power generation assets. Researcher Moon also highlighted the LNG bunkering business utilizing KET’s dedicated bunkering terminal as a long-term focus, with full-scale business entry scheduled for the end of 2027.

He further commented, "Although the power generation segment is expected to see reduced earnings next year due to a decline in the system marginal price (SMP) and lower utilization rates following the commissioning of Saeul Unit 3 in the second half of the year, overall operating profit is expected to remain solid thanks to expanded trading profits."