PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩2,750 per share · Prices as of the 2026-10-02 close
Seoul City Gas is a regulated city-gas distributor covering northwestern Seoul and western Gyeonggi that swung back to operating profit in 2025, but its wide quarter-to-quarter earnings swings mean seasonality and policy risk both need close attention.
2025 consolidated revenue reached KRW 1.828tn with operating profit of KRW 17.4bn, marking a return to profit after two years of operating losses.
Q1 2026 operating profit of KRW 22.0bn was the highest in the trailing five quarters, but Q2 2026 swung back to an operating loss of KRW 2.3bn.
City-gas tariffs are set through the raw-material cost pass-through system and locally approved retail supply fees, a fully regulated structure that leaves the company little discretion over margins.
The company's official website announced that city-gas tariff rates would change starting August 2026.
The price-to-book ratio trades at a substantial discount to net asset value, reflecting a notable gap between book value and market value.
Seoul City Gas (Seoul Do-si Gas) is a general city-gas distributor supplying 11 districts including Gangseo-gu in Seoul plus parts of Goyang, Paju and Gimpo in Gyeonggi Province, and is known as the second-largest player nationally by market share behind Samchully.
Its core business is pipeline supply of natural gas across residential, commercial, industrial, cogeneration and transport-fuel end uses, with B2B product sales making up the overwhelming majority of revenue by structure.
Because the business model is essentially a distribution margin on purchased LNG resold to end customers, gross margins run low, and media reports indicate the company's gross margin ratio has stayed in the single digits in recent fiscal years.
Through affiliates such as SCG Solutions, the group also generates service and construction revenue, a segment reported to carry relatively higher margins than product sales. The group is also pursuing new businesses including an EV-charging venture (SeoulEV).
Retail city-gas tariffs are set by adding the wholesale raw-material cost (from KOGAS) to a locally-approved retail supply fee, making this a fully regulated pricing structure that leaves the company little room to independently expand margins.
Seoul applies a single tariff averaged across the city's five gas distributors (Seoul City Gas, Kowon Energy Service, Yesco, Daeryun ENS, Kiturami Energy), a structural feature meaning an individual company's cost efficiency does not translate directly into margin.
Seasonally, revenue and profit concentrate heavily in the winter-heating quarters (Q4 and Q1), well above Q3 levels.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩299.1B | ₩2.4B | 0.8% |
| 2025Q3 | ₩196.3B | -₩13.4B | −6.8% |
| 2025Q4 | ₩543.7B | ₩3.5B | 0.6% |
| 2026Q1 | ₩769.5B | ₩22B | 2.9% |
| 2026Q2 | ₩275.5B | -₩2.3B | −0.9% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩1.7T | ₩3.3B | ₩17.9B | 0.2% | 1.7% | 77.7% |
| 2023 | ₩1.7T | -₩3.2B | ₩20.5B | −0.2% | 1.9% | 66.4% |
| 2024 | ₩1.7T | -₩10.3B | ₩33.9B | −0.6% | 3.1% | 60.9% |
| 2025 | ₩1.8T | ₩17.4B | ₩30.9B | 1.0% | 2.8% | 60.3% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-21
Consolidated 2025 revenue was KRW 1.82800tn, up from KRW 1.70379tn in 2024, and operating profit turned positive at KRW 17.406bn, reversing operating losses of KRW 10.285bn in 2024 and KRW 3.201bn in 2023.
Net income attributable to owners was KRW 30.934bn, slightly below the KRW 33.890bn recorded in 2024, a difference that appears to stem from differing non-operating contributions between the two years.
Quarterly results show pronounced seasonality: Q3 2025 posted revenue of KRW 196.305bn with an operating loss of KRW 13.357bn and an owners' net loss of KRW 7.476bn during the off-season, before revenue surged to KRW 543.733bn in Q4 2025, flipping to an operating profit of KRW 3.515bn and owners' net profit of KRW 5.770bn.
Q1 2026 delivered the strongest quarter of the trailing five, with revenue of KRW 769.497bn, operating profit of KRW 22.042bn and owners' net profit of KRW 21.582bn, reflecting both peak winter-heating demand and timing effects in cost pass-through.
That strength reversed sharply in Q2 2026, however, as revenue fell to KRW 275.500bn and the company posted an operating loss of KRW 2.348bn, with owners' net profit narrowing to a modest KRW 2.495bn.
Viewed across the trailing four-quarter window (Q3 2025 through Q2 2026), this confirms that annual results depend heavily on a single peak-season quarter (Q1).
On the cash-flow side, 2025 operating cash flow jumped to KRW 82.719bn from KRW 23.929bn in 2024 and KRW 12.921bn in 2023, a change likely tied to working-capital swings linked to the raw-material receivable and settlement structure.
Korea's city-gas industry operates on a two-tier structure in which KOGAS holds a monopoly on LNG imports and wholesale supply, while regional general gas distributors handle retail sales to end customers.
Raw-material costs are, in principle, designed to pass through international LNG price and FX movements via a cost-linkage system, but the linkage has often been suspended for extended periods under government price-stabilization policy, and in the process KOGAS's residential-sector receivables reportedly grew from KRW 1.7656tn in 2021 to KRW 13.7496tn as of end-June 2024.
This receivable-and-deferral structure creates timing gaps between wholesale settlement and retail sale that add volatility to individual gas distributors' quarterly earnings.
Seoul maintains a distinctive arrangement in which five distributors (Seoul City Gas, Kowon Energy Service, Yesco, Daeryun ENS, Kiturami Energy) are subject to a single retail tariff based on a cost average across all five, a structure that has repeatedly raised cross-subsidy concerns as cost differences among individual companies translate into profitability gaps.
On the demand side, domestic city-gas penetration has already reached a high level, limiting structural growth in residential demand, leaving industrial and power-generation demand along with alternative uses such as cogeneration and air-conditioning as the main growth variables.
Competitively, Seoul City Gas reportedly holds the nation's second-largest market share behind Samchully, effectively enjoying a near-monopoly within its fixed northwest Seoul metro service area, though this geographic fixity also limits scope for expansion into new markets.
The company announced via its official website that city-gas tariff rates would change starting August 2026, understood to be part of a periodic tariff revision tied to the raw-material cost-linkage system and Seoul's retail supply-fee adjustments.
The direction and magnitude of that adjustment will be clarified through further disclosures, and its effect on cost pass-through and margin will need to be confirmed in upcoming quarterly results.
Given that the strength of Q1 2026 reversed in Q2, the second half is likely to repeat the familiar seasonal pattern of an off-season Q3 loss followed by a Q4 recovery tied to winter demand.
The trajectory of international LNG prices and the won-dollar exchange rate remains a key variable directly affecting quarterly revenue scale and earnings through the cost-linkage timing lag.
How quickly and by what method KOGAS resolves its accumulated receivables, in coordination with government price policy, is also worth monitoring as it can affect margin structures across the city-gas industry as a whole.
On the new-business front, group-level expansion such as the EV-charging venture continues, though its financial contribution relative to the core city-gas business still appears limited.
Seoul City Gas's price-to-book ratio trades at a substantial discount to net asset value, a pattern that can be read as reflecting the low margins and limited growth typical of a regulated utility.
On the dividend side, the 2025 year-end cash dividend was decided with a dividend yield that appears to sit on the lower end within the industry.
The pattern of operating profit swinging from losses in 2023-2024 to a profit in 2025, then to the strongest quarter on record in Q1 2026 before reverting to a loss in Q2, suggests that valuation is better assessed on an annual or multi-year basis rather than from a single quarter.
The price-to-earnings ratio warrants comparison against the city-gas sector's historical trading range, and given the large seasonal swings in earnings, judging valuation from any single point-in-time multiple is not straightforward.
The relationship between the price level relative to net assets and the pace of earnings recovery is something that will need continued reassessment as quarterly results are disclosed going forward.
PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-08-21
Consolidated operating profit of KRW 17.406bn in 2025 ended two consecutive years of losses, while operating cash flow of KRW 82.719bn was the highest of the past four years. This appears to reflect simultaneous cost pass-through and volume recovery. Q1 2026 also posted the strongest quarterly operating profit of KRW 22.0bn in recent quarters.
Seoul City Gas holds an effectively monopolistic pipeline supply franchise across northwestern Seoul and parts of western Gyeonggi Province, limiting the risk of new competitive entry. It reportedly ranks second nationally by market share behind Samchully, providing a stable business foundation.
The price-to-book ratio trades at a substantial discount to net asset value, highlighting a gap between book value and market valuation. This can be a point of discussion regarding how the market values a company with an asset base of KRW 1.1212tn in total equity as of 2025.
The progression from an operating loss of KRW 13.357bn in Q3 2025 to a Q4 profit, then to the strongest quarter on record in Q1 2026, followed by another loss in Q2, reduces earnings predictability. The heavy dependence of annual results on the peak Q1 season can also be flagged as a risk factor.
Retail city-gas tariffs are set through the raw-material cost-linkage system and locally approved supply fees, and Seoul applies a single tariff based on a cost average across five distributors.
Under this structure the company has little independent ability to expand margins, and cost pass-through can be delayed when government price-stabilization policy takes priority.
Media reports indicate the gross margin ratio stayed in the single digits in a recent fiscal year, reflecting the structural nature of a distribution-margin business model.
The dividend yield also appears to sit on the lower end within the sector, making it difficult to build a holding rationale on dividend appeal alone.
City-gas tariffs can have raw-material cost linkage suspended under government and local price-stabilization policy, and when this happens, cost increases are not immediately reflected in retail rates, temporarily squeezing margins.
The timing and method of KOGAS's receivable recovery is also a variable that could affect tariff policy across the city-gas industry.
Because revenue and profit concentrate in the winter-heating peak season, temperature and climate variability directly affect specific-quarter results. If mild winters persist, the scope for improvement in peak-season results could be limited.
Media reports have noted that a significant portion of the company's service and construction transactions occur with a specific affiliate, which has been flagged as capturing relatively higher margins in this structure. Such intra-group transaction patterns are an area warranting ongoing governance scrutiny.
The actual impact of the August 2026 tariff-rate change on revenue and margin should be confirmed through Q3 2026 earnings disclosures.
The Q3 2026 (seasonally weak quarter) preliminary earnings disclosure should be checked to see whether the loss widened or narrowed versus the year-earlier operating loss of KRW 13.357bn.
The 2026 full-year results along with the dividend decision disclosure are expected around this time, warranting a check on whether the annual earnings recovery continued and whether dividend policy changed.
It is worth checking how international LNG price and won-dollar exchange rate trends feed into the next raw-material cost-linkage cycle, and whether there is any change in KOGAS's receivable-recovery policy.
Seoul City Gas is a regulated city-gas distributor holding an effectively monopolistic position within a fixed service territory in northwestern Seoul, and it showed both the positive signal of a 2025 return to operating profit with improved cash flow, and considerable volatility with a record Q1 2026 followed by another Q2 loss.
The regulated structure of raw-material cost linkage and locally approved tariffs works as a double-edged factor, capping the upside to margins while also creating timing lags in results tied to policy changes.
The next things to watch are how the August 2026 tariff-rate change flows through to upcoming quarterly results, and whether the seasonally weak Q3 shows improvement.
The share price's discount to net asset value and its dividend yield sitting on the lower end within the sector suggest investors should weigh the relationship between asset value and market value, and between profitability and shareholder returns, together.
Rather than reacting to any single quarter's strong or weak result, investors would benefit from tracking the multi-year earnings-recovery trend and any changes in cost pass-through policy.
Report written 2026-09-05 · Data as of 2026-09-04
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