[Click eStock] "Samchully, Gradual Profit Improvement Expected"

[Asia Economy Reporter Park Jihwan] Hana Financial Investment maintained a target price of 100,000 KRW and a 'Buy' investment rating for Samchully on the 19th, stating that it is time to pay attention to gradual net profit improvement.

Yoo Jaeseon, a researcher at Hana Financial Investment, said, "Although city gas sales volume is increasing mainly in the residential sector, it is not easy to improve performance due to rising costs such as labor and commission fees," adding, "Since the minimum wage increase next year is expected to be low, additional burdens are expected to be limited."

Power generation is currently facing a high possibility of stagnant profitability due to weak System Marginal Price (SMP), decreased electricity demand, and recovery of base load power generation ratio. It was explained that it is necessary to monitor the situation as measures to realize fuel cost settlement for LNG combined power plants may be established in the future.

Third-quarter sales amounted to 518.8 billion KRW, down 9% year-on-year, with separate sales declining due to a drop in selling prices despite increased city gas sales volume, and power generation sales underperforming due to decreases in SMP and utilization rates. Operating profit turned to a loss of 1.1 billion KRW compared to the previous year.

Researcher Yoo Jaeseon analyzed, "Regarding equity-method income, from next year, a base effect of increased depreciation expenses for Gyeonggi Green Energy is expected," and "net profit improvement is anticipated through a reduction in non-operating expenses."

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