"SK Gas Hydrogen Business Materializes... JV with Lotte Chemical in Focus"

[Asia Economy Reporter Park So-yeon] Meritz Securities stated that "Attention should be paid to SK Gas's concretization of the hydrogen business in 2022 and the contribution of LNG power plant performance in 2024."

According to FN Guide on the 27th, Meritz Securities recently evaluated in a report that SK Gas, as the No.1 LPG importer in Korea, has stable business strength despite being hidden by volatility in derivative product profit and loss.

Moon Kyung-won, a researcher at Meritz Securities, mentioned, "In 2022, operating profit is expected to be around 150 billion KRW, slightly down compared to 2021, and pre-tax profit around 180 to 190 billion KRW, as derivative-related profit and loss, which was pre-reflected, is partially recognized as a loss."

Researcher Moon emphasized, "The derivative-related loss is an unusual profit and loss of a 'short-sighted' nature, and from a business perspective, the decline in LPG relative prices can actually have a positive effect, so this should be taken as an investment opportunity."

He explained, "The dividend also aims to maintain the 2021 level (dividend per share of 5,100 KRW), and if achieved, the dividend yield based on the current cycle is 4.3%."

He added, "Active business expansion beyond the LPG business is being pursued, and more than 600 billion KRW investment is planned in 2022." He also judged, "In terms of events, the business details related to the joint venture (JV) with Lotte Chemical within the year (such as fuel cells) will be concretized, which can be an opportunity for multiple expansion."

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