[Click eStock] "E1 Expected to See Profit Growth in Second Half Compared to Last Year... Target Price Raised"

On September 2, Hana Securities stated regarding E1, "Performance improvement is expected in the second half of the year compared to last year," raising its target price by 4.7% to 90,000 won and maintaining its 'Buy' investment rating.

Yoo Jaeseon, a researcher at Hana Securities, said on this day, "Although there are short-term uncertainties, the mid- to long-term growth drivers remain valid." He analyzed, "There are concerns about reduced LPG demand due to a slowdown in downstream market conditions, but discussions on restructuring the domestic petrochemical industry and China's moves to reduce overproduction are gradually creating conditions for a rebound."

He added, "E1 is considering expanding its presence in Vietnam, and the E1 terminal project, which is being promoted in the form of a joint venture, is progressing smoothly. Through its subsidiary Yeosu Green Energy, the company has joined the Korea LNG Industry Association, and is expected to pursue direct LNG imports. Strengthening of the power generation portfolio, including the existing Pyeongtaek Energy & Power, is also anticipated."

In the second quarter of this year, E1's consolidated sales amounted to 2.3 trillion won, a decrease of 23.8% year-on-year, but operating profit increased by 9.2% to 100.7 billion won. In the gas segment, falling LPG prices, a weaker exchange rate, and reduced sales volume had an impact. In the petrochemical segment, volumes declined due to the base effect of last year's maritime logistics disruptions and weakened price competitiveness of naphtha compared to LPG. Exports also decreased as a result of China's tariff measures on US LPG. However, it is assessed that a recovery in sales has been observed since August.

In the power segment, the full-year contribution of newly acquired power plants and improved profitability of financial subsidiaries helped support performance. Improved utilization rates at power plants and increased REC sales also had a positive impact on maintaining stable profit margins. The financial subsidiaries showed improvement due to rising domestic stock markets and increased investment returns, despite higher provisions related to real estate project financing.

Researcher Yoo explained, "Although separate net profit declined due to losses related to LPG derivatives, a recovery is expected in the second half of the year, so concerns about annual profit and dividend per share decreases are limited." He added, "It is important to pay attention to the potential for mid- to long-term profit growth, upward adjustments to dividends per share, and changes in shareholder return policies."

원본보기 아이콘

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.