[Edaily Reporter Kim Hyung-il ] Yuanta Securities Korea assessed that SKGas(018670)is expanding its profit-generating base as its liquefied petroleum gas (LPG) business is complemented by infrastructure and power generation operations. The firm maintained a “Buy” rating and set a target price of 340,000 won.

On the 10th, Son Hyun-jung, an analyst at Yuanta Securities Korea, explained that SKGas is a leading domestic LPG importer and distributor that procures LPG from overseas and sells it both domestically and internationally, and has recently expanded its business scope to include LNG infrastructure and power generation. The company stores and transmits LNG through KET and generates electricity using LNG and LPG as fuel at the Ulsan GPS, which has a capacity of approximately 1.2 GW.

She also assessed that the profit base of the core LPG business is solid. While quarterly earnings volatility arises due to timing differences in recognizing gains and losses from physical and derivative transactions, the analysis indicates that annual profit-generating capacity is maintained based on domestic and international sales and trading. Following a loss in the second quarter, she projected that LPG profits would recover in the second half of the year as the lag between selling prices and costs narrows.

The report also highlighted the improvement in profit resilience resulting from the operation of the Ulsan GPS. It explained that since the facility can utilize both liquefied natural gas (LNG) and LPG, the company can select the more economically viable fuel based on relative prices, and that the facility is connected to existing LPG trading operations and KET storage infrastructure. With a structure that allows the company to choose between domestic sales, overseas trading, and power generation depending on market conditions, the report projected that stable power generation profits will continue.

The firm also viewed the expansion of cash utilization capacity following large-scale investments as a positive development. As investments concentrated on the Ulsan GPS and KET projects enter the operational phase, the firm projected that capital expenditure (CAPEX) burdens would decrease while cash generation capacity would expand. Given that the current shareholder return policy remains in effect through this year, the firm judged that if the next policy includes concrete measures such as increased dividends or the use of treasury stock, this could serve as an additional driver of corporate value growth.

The Ulsan Data Center (AIDC) was cited as an additional growth opportunity. As the Ulsan AIDC begins phased operations starting in 2027, demand for electricity and LNG in the region is expected to increase.