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Kyungdong City Gas · 267290 · Utilities

Kyungdong City Gas: Thin Margins, Low Multiples and a Wide Range of Model Estimates

Why this report

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Kyungdong City Gas trades at ₩20,700 with a market cap of about ₩122.0B, a P/E of 3.3 and a P/B of 0.2. Revenue is large relative to the company's size, but operating margins are only 2.3% and no dividend yield is shown.

Written Oct 25, 2026 · Data as of Oct 23, 2026 · 0 views

This is not financial advice. The report does not recommend buying or selling anything.

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Thesis

The data supports a picture of a very low-multiple utility with steady, modest profitability. Trailing net income of ₩37.1B is above the ₩32.8B reported for 2025, ROE is 7.9%, and the balance sheet shows more cash than borrowings. Enterprise value is negative at about -₩200.9B, which reflects that cash and other items exceed market cap plus debt.

What the data does not support is a clear growth story. Revenue has fallen from ₩2.30T in 2022 to ₩1.76T in 2025, and margins stay in a narrow 1.1% to 2.3% band. The dividend yield is shown as 0.0%, so shareholders are not receiving visible income in this data. The model estimate range is also very wide, which signals high uncertainty.

Business overview

Kyungdong City Gas is a KOSPI-listed utilities company, listed on 2017-05-12, with 5,895,406 listed shares and a market cap of about ₩122.0B. Co-CEOs are named as 송재호 and 손현익. Revenue was ₩1.46T in 2021, jumped 58.2% to ₩2.30T in 2022, then fell 21.9% in 2023 to ₩1.80T. It slipped a further 0.4% in 2024 and 1.8% in 2025 to ₩1.76T. Trailing revenue to H1 2026 is ₩1.72T.

Financial analysis

These figures come from filed financial statements. Operating income was ₩33.0B in 2025 (1.9% margin), up from ₩27.0B in 2024 (1.5%) and ₩25.3B in 2022 (1.1%). Net income was ₩32.8B in 2025. Trailing to H1 2026, operating income is ₩38.9B (2.3% margin), net income ₩37.1B (2.2% margin) and ROE 7.9%, versus 7.1% in 2025 and 5.9% in 2021.

The balance sheet looks conservative: liabilities to equity is 88.0%, cash is ₩48.4B and borrowings are ₩5.0B. Trailing free cash flow is ₩98.1B, well above net income.

Valuation

The P/E is 3.3 and the P/B is 0.2, with a P/S of 0.1. At year-end the P/E was 3.7 in 2025 and 3.6 in 2024, and the P/B was 0.2 to 0.4 across 2021 to 2025, so current multiples sit at the low end of the company's own range. Among the listed peers, Samchully has the same P/E and P/B (3.3 and 0.2). Korea Electric Power has a P/E of 2.3 and a P/B of 0.4, Korea Gas 5.9 and 0.3, Korea District Heating 2.4 and 0.3, and SGC Energy a P/B of 0.7 with no P/E available. EV/EBITDA is not available.

The valuation model, a 5-year discounted cash flow at a 7.4% rate, gives a base-case estimate of ₩103,726 per share, with a bear case of ₩41,097 and a bull case of ₩217,262. This is a model estimate based on the assumptions shown, not a target, and it sits far from the ₩20,700 share price. The gap shows how sensitive the result is to cash flow assumptions.

Catalysts

  • An investor relations event was filed on 2026-10-19, and a news item on 2026-10-22 listed the company in a daily IR roundup.
  • A Change of Representative Director was filed on 2026-08-21 after an extraordinary shareholders' meeting, and another on 2026-03-24, so leadership changes are recent.
  • The half-year report filed on 2026-08-14 showed trailing net income of ₩37.1B and ROE of 7.9%, which are the latest results available.
  • Foreign ownership fell to 8.0% from 8.4% 60 days ago, and 20-day foreign flows are slightly negative, so a change in that trend could matter.
  • Shareholder returns could draw attention given the 0.0% dividend yield shown, though no filing in the data announces a change.

Risks

  • Operating margins are thin at 2.3%, so small cost or pricing changes could move profit materially.
  • Revenue has declined from the 2022 peak of ₩2.30T to ₩1.76T in 2025, and growth is not visible in the data.
  • The model range of ₩41,097 to ₩217,262 per share is very wide, so the estimate carries high uncertainty.
  • The data shows no dividend yield, so returns depend on share price movement and the stock is down 3.9% over one month and 0.5% over one year.
  • Foreign ownership is declining slightly and the stock has a small market cap, which may mean limited liquidity and a narrow investor base.

Closing view

The data shows a small utility with consistently low multiples, rising but slim profits, healthy cash flow and a net cash position. Against that, revenue has trended lower since 2022, margins are thin, no dividend is shown, and the model estimate range is too wide to give a precise anchor. The evidence supports a view of a stable but low-growth business valued at a deep discount to book value, with the reasons for that discount only partly visible in the data.

Model estimate of fair value

Bear
₩41,097
+100%
Base
₩103,726
+405%
Bull
₩217,262
+957%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Base case of the 5-year discounted cash flow model on the stock's Valuation tab (statements TTM to H1 2026; discount rate 7.4%). Bear and Bull move the main assumptions by fixed steps. See and change the assumptions

Filings and data used

Report history

  1. Oct 25, 2026InitiationStart of coverage (reader request)Kyungdong City Gas: Thin Margins, Low Multiples and a Wide Range of Model Estimates

Built only from jonbur's own data: prices and investor flows, filed financial statements and filings, and news headlines. Disclosed (filed) data is labelled as such. Written by AI and may contain mistakes.

This is not financial advice. The report does not recommend buying or selling anything.

Source: KRX statistical information