[THE INVESTOR] Korea Electric Power Corp.’s external environment is turning positive for investors, said Korea Investment and Securities on Dec. 20 raising the target price to 43,000 won (US$38.10) from 37,000 won.
The usage rate of nuclear power plants has already rebounded in the second quarter and scheduled maintenance is being completed, highlighting the low baseline effect for next year. Uncertainties over Korea’s energy policy are easing while oil price recently has declined sharply. KEPCO will save 200 billion won with oil price drop of US$1 per barrel, said analyst Choi Go-un.
In the short term, low baseline effect alone signifies over 3 trillion won profit improvement next year. The government will not be able to push for shifting away from nuclear power, while the firm will suffer for another year as the economic outlook is grim. As it can turn to black without raising electricity rates, investors can comfortably purchase its stocks with a long-term perspective, factoring in structural changes, she said.
By Hwang You-mee (email@example.com)