KB Securities noted on the 25th that Korea Electric Power Corporation's first quarter performance is expected to show a significant increase compared to the same period last year as the operating profit margin greatly improves. As a result, it maintained its investment opinion of 'buy' and raised the target stock price by 3.4% to 30,000 won. The previous closing price for Korea Electric Power Corporation was 22,300 won.
KB Securities predicts that Korea Electric Power Corporation's first quarter sales will reach 25 trillion won, an increase of 7.2% compared to the same period last year. Operating profit is expected to rise by 255.7% compared to the same period last year to 4.6 trillion won, while net profit attributable to controlling shareholders is forecasted to increase by 151.7% to 1.4 trillion won. The expected operating profit exceeds previous KB Securities forecasts and market consensus by 26.9% and 28.8%, respectively.
Jung Hye-jung, a researcher at KB Securities, said, 'The sales revenue for the first quarter will increase compared to the same period last year as the increase in industrial electricity rates, reflecting the increase from last October, raises the electricity sales price.' They also expect that 'operating profit will increase significantly due to lower liquefied natural gas (LNG) fuel costs, the drop in electricity market price (SMP), and the rise in nuclear power generation utilization.'
They further projected that the performance improvement of Korea Electric Power Corporation would be prominently visible this year. Researcher Kim pointed out that 'the backdrop is the combination of lowered energy prices, improved generation mix, and government policies that allow for the improvement of Korea Electric Power Corporation's financial soundness,' adding that 'one of Korea Electric Power Corporation's current challenges is to improve its financial structure in line with the maturity date of the issuance limit for Korea Electric Power Corporation's bonds in 2027.'
They added, 'As of the end of 2024, Korea Electric Power Corporation's standalone bonds will total 72.1 trillion won, while the combined capital and retained earnings will be only 18.8 trillion won.'