April 25, 2024

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[THE INVESTOR] Korea Gas will maintain solid earnings growth as it gains from the change in government policy, said Hanwha Investment and Securities on April 24, raising the target price to 64,000 won (US$59.40) from 60,000 won.

The government has confirmed a long-term supply and demand plan for natural gas, due to which demand for power generation use in particular has increased significantly, said analyst Shin Hyeon-jun.

Boosted by the policy and being a high season, KOGAS’ LNG sales volume in the first quarter hiked 27.6 percent on-year to 12.34 million tons. 

Factoring in the low operation ratio of nuclear power plants and temporary shutdown of aged coal power plants in spring which will bolster increase in demand, annual earnings prospect of the company has been raised, said the analyst. 

Profits from its resource project in Australia also will imrove, and will raise dividend rates, noted Shin maintaining a “buy” recommendation. 

By Hwang You-mee (glamazon@heraldcorp.com)