Kim Hyun-tae, a researcher at BNK Investment & Securities, stated, "Historically, GS's stable performance and dividend appeal have been key investment points, but its weak growth has been a factor in the discount on its price-to-book ratio (PBR). If the AI data center business materializes, it is expected to enhance growth prospects and raise PBR expectations."
The company anticipates that its consolidated operating profit for the second quarter will exceed market expectations, reaching 1.3 trillion won. Kim explained that the increase in profits is primarily due to strong performance from GS Caltex and increased resource development profits from selling UAE crude oil to Caltex.
He added, "The operating profit from lubricants is expected to reach 248.2 billion won, marking a record high for the quarter. This is largely due to significant supply disruptions caused by damage to Shell's Qatar plant, a leading producer of Group III lubricants during the conflict. Caltex is expected to see substantial improvements in performance as prices for both Group III and Group II base oils rise."
Looking ahead to the second half of the year, Kim projected that profits from refining and lubricants would normalize, leading to consolidated operating profits of around 1 trillion won per quarter. However, he noted that the power generation subsidiaries are expected to improve profitability due to rising wholesale electricity prices (SMP).
Kim also highlighted the significance of GS's new business initiatives, stating, "On June 11, GS incorporated GS AI Infrastructure as a new subsidiary. The primary objective of this venture is to design, build, and operate data centers, revealing the group's plans for data center construction."
He remarked, "GS has already integrated power and energy affiliates, GS Construction, and materials for immersion cooling, which positions it advantageously for data center construction and operation. If this business materializes, key factors such as securing anchor tenants, investment and equity structure, and power procurement strategies will be critical checkpoints."
* This article has been translated by AI.
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