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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] Hanwha Investment & Securities analyzed that Korea Electric Power Corporation's (KEPCO) Q4 earnings will likely exceed market consensus. They maintained their "Buy" rating and target price of 33,000 KRW.
The firm attributed the positive earnings to the continued impact of the industrial electricity rate hike implemented last October, along with an increase in nuclear power generation and lower-than-expected System Marginal Price (SMP). Hanwha expects that KEPCO's operating profit for the full year 2024 will be 9.15 trillion KRW, with net profit at 4 trillion KRW, marking a full turnaround from the losses of the previous three years.
For Q4 2024, Hanwha estimated KEPCO's revenue and operating profit to increase by 4.2% and 67.6% year-over-year, respectively, to 23.5 trillion KRW and 3.2 trillion KRW. The operating profit estimate surpasses the market consensus by 23.8%, which was around 2.6 trillion KRW.
Hanwha's researcher, Song, projected that KEPCO’s profit improvement will remain strong in the short term. He stated that the company’s ability to repay debt and resume dividends will likely speed up due to the increased level of expected profits. However, he noted that expectations for additional electricity rate hikes should be tempered, and that freezing the fuel cost adjustment factor could be the best course of action for achieving rate increase effects.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
