Hana Securities noted on 4th that Korea Electric Power Corporation could experience significant expense reductions due to the decline in Australian coal prices. Accordingly, the target stock price remains at 30,000 won, and the investment opinion is 'buy.' The closing price for Korea Electric Power Corporation on the previous trading day was 21,350 won.
Korea Electric Power Corporation's revenue for the 4th quarter last year was 24.1 trillion won, an increase of 7.1% compared to the previous year. The electricity sales volume rose by 0.4% year-on-year, and the sales unit price increased by 4.2%. Notably, the revenue from other sales in overseas projects surged by 260% year-on-year. Operating profit improved by 25.7% to 2.4 trillion won compared to the previous year.
Yu Jae-sun, a researcher at Hana Securities, said, “While the increase in nuclear fuel costs was significant, the expense reductions due to the decline in coal prices were substantial. The reasons for the improvement in purchased power costs are the drop in purchase unit prices and a decrease in PRS expenses.”
He also analyzed, “The exchange rate appears to stabilize slightly around an average of 1,450 won during the first quarter; however, it remains in a negative zone, and international oil prices are fluctuating. The mid-$70s per barrel mark based on Brent may not significantly impact earnings expectations. Nevertheless, significant expense reductions are expected from the decline in Australian coal prices.”
The researcher explained, “The burden of the exchange rate is offset by the decrease in the unpaid amount for natural gas for power generation, suggesting that its impact on import prices is limited. However, concerns regarding the potential departure of existing demand due to rising industrial rates from changes in systems like Power Purchase Agreements (PPAs) and self-generation remain, though there are still few cases, requiring long-term observation.”