SK Gas to Grow Through Phased Operation of Ulsan AIDC Next Year

[Financial News] SK Gas is positioning the operation of its artificial intelligence data center (AIDC) in Ulsan as a new growth driver. Its core liquefied petroleum gas (LPG) business has been joined by power generation and liquefied natural gas (LNG) infrastructure. In addition, Ulsan’s AIDC is expected to begin phased operations in 2027, boosting regional demand for electricity and LNG.
On the 10th, Son Hyun-jung, a researcher at Yuanta Securities Korea, maintained a “Buy” rating on SK Gas and raised the target price by 40% from the previous level to 340,000 won.
She identified increased electricity and LNG demand resulting from the operation of the Ulsan AIDC as a new point of interest.
Ulsan currently hosts key energy infrastructure, including SK Gas’s LPG and LNG procurement network, Korea Energy Terminal (KET), and Ulsan GPS. As data centers are expanded following the start of AIDC operations in 2027, demand for electricity and LNG is expected to rise together, potentially increasing the utilization of existing assets such as Ulsan GPS and KET.
SK Gas has expanded its business from LPG imports and distribution into LNG infrastructure and power generation. In particular, the approximately 1.2-gigawatt Ulsan GPS LNG-LPG Combined Cycle Power Plant can generate power using whichever of LNG and LPG offers greater price competitiveness. Its ability to sell or trade procured energy sources or use them for power generation provides an “option” that strengthens earnings resilience.
The core LPG business is also expected to recover in the second half of the year. Since a substantial portion of the second-quarter loss resulted from a timing difference in recognizing gains and losses between physical assets and derivatives, analysts assess that there will be no significant change in annual earnings capacity. With Ulsan GPS entering full-scale operation, operating profit from power generation is projected to reach 212.8 billion won in 2027.
Large-scale investments have also entered the recovery phase. Son said, “With the investments in Ulsan GPS and KET now largely completed, the burden of capital expenditures (CAPEX) will decline and cash-generation capacity will increase.” She added, “The next shareholder-return policy to be unveiled at the CEO Investor Day in October could also become an additional catalyst for an increase in corporate value.”
Earnings are expected to recover from the third quarter. Operating profit is projected at 425.3 billion won this year and 516.9 billion won in 2027, an increase of 21.5%. The operating margin is also expected to rise from 4.2% to 5.4%.
She added, “Ultimately, the significance of the AIDC is that it will serve as a source of demand that raises the utilization rates and asset values of Ulsan GPS and KET, which have already been built, rather than simply adding a new business to SK Gas.” She continued, “The energy value chain expanded from LPG into LNG and power generation has entered a phase of reevaluation as the AI era begins.”
[email protected] Kang Gu-gwi Reporter