Hana Securities said on the 11th that Samchully may achieve a record annual profit this year. It initiated coverage with a "Buy" rating and a target price of 160,000 won. Samchully's previous closing price was 117,100 won.
Samchully's consolidation operating profit has exceeded 100 billion won for three consecutive years thanks to stabilization in its core business and improved results at subsidiaries. Based on solid cash flow, net debt continues to decline. For Samchully on a separate basis, net debt has been negative for more than 10 years, and in the first quarter of this year it also shifted to a net cash position on a consolidation basis.
Yoo Jae-seon, an analyst at Hana Securities, said, "Samchully is seeking to expand its scale through new businesses, based on a stable financial structure and cash flow," adding, "In February, it acquired 100% equity in Sung Gyung Food for ,19.5 billion won, and given ample available cash, further expansion is fully possible going forward."
Hana Securities projected Samchully's operating profit for the full year at 178.8 billion won, up 12% from a year earlier.
Yoo said, "Even factoring in the possibility of slower profitability in district energy in the second half, considering the improvement in separate first-quarter earnings and the consolidation recognition of Sung Gyung Food, there is a possibility of achieving a record annual profit."
Meanwhile, first-quarter revenue was 1.8 trillion won, down 0.3% from a year earlier, while operating profit rose 13.7% to 110.1 billion won.
In addition, an analysis said that if a new plan to enhance shareholder value emerges, a re-rating of the stock would be possible. Samchully's dividends have long been maintained at 3,000 won per share. The payout ratio spans a wide range, from the mid-10% on a separate basis to around 30%–40%.
This is said to be because the volatility of city gas results, which make up most of Samchully's separate results, is high.
Yoo said, "Because dividends are based on separate net income, the payout ratio can vary depending on the situation," adding, "If dividends are made on a consolidation basis or if the dividend policy is detailed based on dividends per share (DPS), the stock is highly likely to be re-rated."