SK Gas shares rose nearly 5% during trading on expectations of increased profits from the Ulsan GPS power generation project and a recovery in its liquefied petroleum gas (LPG) business.
According to the Korea Exchange, as of 1:24 PM, SK Gas was trading at 254,500 won, up 12,000 won (4.95%) from the previous trading day.
Analysts predict that the expansion of profits from Ulsan GPS's power generation business will continue to improve SK Gas's performance. Yuanta Securities forecasts that operating profit from the power generation business centered on Ulsan GPS will increase by 83.4%, from 116 billion won this year to 212.8 billion won next year.
Ulsan GPS operates power plants with a capacity of 1,212 MW based on LNG and 1,171 MW based on LPG, capable of using both fuels. This flexibility allows for the selection of the more economically viable fuel depending on price, which is expected to enhance profitability in the power generation sector.
SK Gas, a company that imports and distributes LPG both domestically and internationally, has recently expanded its business scope to include LNG storage and transmission infrastructure, diversifying its revenue structure.
Notably, the Ulsan Artificial Intelligence Data Center (AIDC) is expected to gradually begin operations in 2027, leading to increased demand for electricity and LNG. Consequently, the utilization of existing energy assets, such as Ulsan GPS and Korea Energy Terminal (KET), is also anticipated to rise.
The solid profit base of the LPG core business is another factor fueling expectations for improved performance. Son Hyun-jung, a researcher at Yuanta Securities, stated, "While quarterly performance volatility in the LPG business may continue, the annual profit generation capacity based on domestic and international sales and trading will be maintained."
The escalation of tensions between the United States and Iran has also contributed to increased concerns over energy supply chains, impacting stock prices. The geopolitical risks surrounding the Strait of Hormuz have heightened interest in gas-related companies capable of responding to changes in energy supply and demand.
* This article has been translated by AI.
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