LS SECURITIES analyzed that the Korea Gas Corporation's accounts receivable for the second quarter of this year will decrease significantly, but the direction of rate increases remains valid in the long term. It revised its target stock price upward by 8% from the previous 50,000 won to 54,000 won and maintained an investment opinion of 'buy.' The Korea Gas Corporation's closing price on the previous trading day was 45,850 won.
LS SECURITIES forecasted that the consolidated revenue of the Korea Gas Corporation will reach 7.291 trillion won and operating profit will be 412.3 billion won in the second quarter of this year. The operating profit is expected to decrease by about 12% compared to the previous year and align with the securities industry's projections.
Annual operating profit is expected to be 2.2788 trillion won, a decrease of 24% from the previous year. Researcher Seong Jong-hwa of LS SECURITIES noted, "Operating profit from overseas businesses is expected to drop to 250 billion won, down from 450 billion won last year," and explained, "Interest income from accounts receivable is also forecasted to decrease by about 80 billion won to 420 billion won compared to 500 billion won last year due to falling interest rates."
Researcher Seong stated that the accounts receivable of the Korea Gas Corporation for the second quarter of this year is expected to decrease significantly. Although the increase in accounts receivable for civil gas is expected to diminish slightly compared to the previous quarter, this is due to the anticipated exhaustion of accounts receivable for commercial gas.
Researcher Seong noted, "The exhaustion trend of commercial accounts receivable will continue after the third quarter," adding that "in order for the overall recovery of accounts receivable, the collection of civil accounts receivable must occur, and rate increases are necessary."
However, it is uncertain whether the civil gas rate increase will take place starting in the third quarter of this year. Researcher Seong stated, "Considering the government's policy focused on prioritizing people's livelihoods, it is difficult to predict whether rate increases will be implemented immediately from the first quarter after the presidential election," and added, "Of course, if rate increases occur in August and September, it could serve as a strong momentum."
He further added, "The long-term direction for rate increases remains unchanged, and the positive investment outlook for the medium to long term is valid."