NH Investment & Securities evaluated that the uncertainty factors regarding SK Gas have been resolved. It raised the target stock price from the previous 250,000 won to 300,000 won and recommended a 'buy' investment opinion. On the most recent trading day, the 7th, the closing price of SK Gas was 235,500 won.
On the 10th, Lee Min-jae, a researcher at NH Investment & Securities, explained, "The reason for raising the target stock price is due to the operation of the Ulsan (gas combined cycle power plant) GPS in the first quarter, which has reduced the previously applied discount rate from 20% to 0%. This year's price-to-earnings ratio (PER) based on performance is 5 times, making the valuation attractive enough."
The Ulsan GPS consists of two gas turbines and one steam turbine, totaling 1.2 gigawatts (GW). The total investment cost is 1.4 trillion won, with SK Gas holding 99.48% equity. It is a power plant that can use both liquefied natural gas (LNG) and liquefied petroleum gas (LPG) interchangeably, advantageous from the standpoint of system marginal price (SMP).
This researcher noted, "Despite the lower SMP since last October, the high profitability of SK Gas is expected to continue," adding, "The revenue generated from the Ulsan GPS this year is estimated to exceed 200 billion won."
SK Gas is expected to start an energy storage system (ESS) project in southern Texas with SK eternix and APEX by the end of the first quarter of this year. The total investment cost is 140 billion won, and construction of a second project is planned to begin within this year.
This researcher diagnosed that "Texas is experiencing rapidly increasing electricity demand due to data centers and reshoring (the return of overseas corporations), thus making renewable energy investments very active." He added, "Due to the high demand for renewable energy, the potential for arbitrage transactions using ESS is significant," stating that "the expansion of ESS is expected to have a positive impact on revenue."