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Doosan Fuel Cell, SK Gas, and Korea Gas Corporation Highlighted as Beneficiaries in the Second Half of the Year

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] Amid anticipated positive developments related to hydrogen in the second half of the year, energy companies are emerging as beneficiaries. Their strengths lie in stable stock price trends and cost competitiveness in hydrogen production.

According to the Korea Exchange on the 17th, Doosan Fuel Cell, a leading hydrogen-related stock, closed at 48,850 KRW the previous day, marking a 23.83% increase over the past month. Energy companies SK Gas and Korea Gas Corporation also rose by 18.57% and 20.68%, respectively, during the same period.

Hydrogen-related stocks have experienced high volatility since the beginning of this year. Doosan Fuel Cell rose approximately 16.16% from 56,300 KRW on January 4 to an all-time high of 65,400 KRW on February 15 but then continuously declined. From February 15 to May 13, Doosan Fuel Cell recorded a drop of 35.37%.

The significant fluctuations in hydrogen stocks are due to their growth being driven by policy momentum. Stock prices surged amid expectations that the government would announce the ‘Hydrogen Economy Roadmap 2.0’ in February, but prices fell when the announcement was suddenly delayed. Earnings have also followed policy trends. As the specific details of the ‘Mandatory Fuel Cell Power Generation System’ are expected to be finalized within the year, market orders have been postponed to the second half. Consequently, Doosan Fuel Cell’s new orders in the first quarter were sluggish at 6 megawatts (MW).

In this context, energy companies that are entering the hydrogen business while maintaining stable stock price trends have begun to attract attention. In fact, during the approximately three months when Doosan Fuel Cell’s stock price plummeted, SK Gas rose by 4%, and Korea Gas Corporation fell by only 2.73%.

Energy companies have the advantage of being able to intervene in the hydrogen production value chain to reduce costs. SK Gas, for example, is working to reduce hydrogen production costs by utilizing existing facilities. It is expected to expand hydrogen charging stations by leveraging its 489 liquefied petroleum gas (LPG) filling stations. Jeon Hye-young, a researcher at KTB Investment & Securities, explained, "SK Gas announced plans to build a hydrogen complex within the back site of its subsidiary Ulsan GPS. If vertical integration from production to transportation, storage, and utilization is achieved, costs will be reduced."

Korea Gas Corporation plans to reduce hydrogen costs through a memorandum of understanding (MOU) with GS Caltex. They will jointly pursue a hydrogen liquefaction and storage project utilizing liquefied natural gas (LNG) cold energy. Using LNG cold energy is known to reduce hydrogen-related costs. Additionally, starting from the second half of next year, they plan to establish hub-type hydrogen production bases in Gwangju Metropolitan City and Changwon, Gyeongnam Province.

This content was produced with the assistance of AI translation services.