[Click e-Stock] "SGC Energy Now Eyes AI Data Centers... Target Price Raised"

On March 24, Hana Securities raised its target price for SGC Energy to 76,000 won, reflecting the potential of the company’s new artificial intelligence (AI) data center business. The investment opinion was maintained at 'Buy'.

Yoo Jaeseon, a researcher at Hana Securities, stated in a report published the same day, “Rapid profit growth is expected due to the increase in issuance volume and sales revenue from the higher weight applied to renewable energy certificates (REC) through next year, as well as higher electricity sales from increased prices after converting to the district electricity business. Although the equity structure of the data center business, which aims to launch in the first quarter of 2028, has not yet been finalized, it is expected to secure a meaningful stake.”

SGC Energy’s revenue for the first quarter of this year is projected to reach 634.5 billion won, an increase of 2.6% year-on-year. In the power generation and energy segment, a decline in electricity sales is unavoidable due to the drop in the system marginal price (SMP) compared to last year. However, construction and real estate are expected to maintain a stable growth trend, supported by the progress of overseas plant construction. Operating profit is projected to reach 30.6 billion won, up 74.6% from the previous year. Although the sales price in the power generation and energy segment is falling, margins can improve due to lower prices of key raw materials such as wood chips. As the REC weight increases, REC issuance is expected to increase gradually, which may improve annual performance contributions. The fast rise in emission allowance prices this year is also expected to offset much of the impact from reduced allocation. In construction, profits are expected to improve slightly due to the full-scale progress of overseas projects.

Researcher Yoo added, “There are still additional factors to look forward to, such as the engineering, procurement, and construction (EPC) work of consolidated subsidiaries, the potential construction of new power plants as capacity expands to 300MW, and additional power purchase agreement (PPA) contracts. In the long term, if the overall group’s performance contribution reverses, SGC Energy’s status could shift from a power generation company to a colocation service provider.”

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