KOGAS Leads in Oil, Hydrogen, and Stock Momentum

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[Asia Economy Reporter Junho Hwang] Korea Investment & Securities raised the target price of Korea Gas Corporation to 50,000 won on the 25th, anticipating that the company will gain stock price momentum this year. They believe that the impact of rising oil prices has not yet been reflected in the stock price, and the hydrogen investment plan is also viewed positively for the stock price.

Korea Investment & Securities projected Korea Gas Corporation's annual operating profit at 1.2 trillion won, a 33% increase compared to the previous year. This forecast is based on the expectation that overseas operations will normalize due to the rise in oil and LNG prices. With improved performance, the dividend yield is also expected to recover to 3%.

In particular, the investment plan for the hydrogen business, as a new growth engine, is expected to be concretized, which was highly evaluated for its growth potential. Among electric power public enterprises, Korea Gas Corporation is expected to be re-evaluated for its role, as it has established the fastest direction toward eco-friendliness.

Choi Go-woon, a researcher at Korea Investment & Securities, stated, "Like LNG, Korea Gas Corporation, which can be responsible for the hydrogen distribution value chain, is the most suitable entity to secure economies of scale," and added, "Reflecting expectations for a performance turnaround and its role in the hydrogen economy, we raise the target price by 16% to 50,000 won (applying 2021F PBR of 0.59 times)."

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