Korea Gas Corp., the state-run natural gas importer and supplier, had the best-performing stock of the year, according to a report by Daeshin Securities on Monday.
In a survey of stock gains between Jan. 2 and Dec. 18 on the top 100 stocks by market value, shares of KOGAS, the world’s largest liquefied natural gas importer, gained the most, rising 82.3 percent. Shares of Amore Pacific, the nation’s largest cosmetics brand, and Orion, the second-largest confectionery company in Korea, followed, up 76.3 percent and 52.9 percent, respectively. Samsung Electronics was ranked sixth in the 2012 stock gain ranking, extending its stock gains by 43.2 percent.
Despite the company’s high debt-to-equity ratio reaching about 347.7 percent as of 2011, shares of KOGAS continued to rise throughout the year based on a rosy outlook for natural gas in the global energy market and success stories in its overseas gas field exploration and production projects, Daeshin Securities said.
Gas companies around the world attracted attention from investors this year as shale gas, natural gas that is trapped within shale formations, has been emerging as an alternative energy source to regular gas.
KOGAS took the lead in entering the emerging shale gas market. In January this year, it inked a long-term contact with the U.S.-based Sabine Pass to import 3.5 million tons of liquefied shale gas per year for 20 years from 2017. The amount accounts for 10 percent of the nation’s total annual LNG imports.
Consecutive successes in overseas gas field E&P projects were another key factor to boost KOGAS’ stock value. For instance, KOGAS secured an 18.75 stake in the Zubair oil field in Iraq last year. This year, it found gas in the oil field in Mozambique where it holds a 10 percent stake.
According to KOGAS, the continued investments in overseas E&P projects are expected to raise its energy self-sufficiency rate to 25 percent by 2017 from 3.6 percent in 2011.
Industry watchers, however, said that KOGAS has to find a way to reduce its debt-to-equity ratio for its sustainable future. The government’s control of gas prices and investments in overseas E&P markets for the past few years dented the balance sheet of KOGAS. Standard & Poor’s, a U.S.-based credit evaluation agency, lowered KOGAS’ stand-alone-credit profile by one notch to BB+ from BBB- on Dec. 14.
KOGAS had sought to issue asset-backed-securities based on its 5.5 trillion won debt in a bid to reduce its debt ratio, but the plan was put on hold without a specific explanation for the reason yesterday. Affected by this development, shares of KOGAS fell 4.9 percent to 69,800 won on Monday.
“KOGAS’ high debt ratio is not always harmful to the company. In the longer term, it could form an aggreement for a rise of gas price,” Eugene Securities and Investment said, recommending KOGAS stock as a “buy.”
By Seo Jee-yeon (
jyseo@heraldcorp.com)
