Jung Hye-jung, a researcher at KB Securities, noted on Oct. 21 that Korea Electric Power Corporation has recently drawn attention as a nuclear power-related stock, but the direction of electricity rates still has the greatest impact on the value of the corporations.
While raising the target price for Korea Electric Power Corporation to 47,000 won, Jung kept a Hold rating, considering that the upside is 11.4% compared with the previous day's closing price (42,200 won).
Jung projected that Korea Electric Power Corporation's third-quarter (July–September) results this year will beat market expectations. She presented estimates of 27.8 trillion won in revenue and 5.5 trillion won in operating profit for the third quarter, with operating profit 9.1% higher than the market consensus.
Jung said, "The effect of lower liquefied natural gas (LNG) and coal power generation unit costs likely reduced power procurement costs by about 910.1 billion won, contributing to profit improvement."
However, expansion of the power grid, including construction of the energy highway promoted by the Lee Jae-myung administration, and additions to renewable energy generation centered on offshore wind all must be supported by increased capital investment by Korea Electric Power Corporation. In addition, as the sunset for raising KEPCO bond issuance limits (from 2 times to 5 times) approaches the end of 2027, financial structure improvements are also needed. Ultimately, this means electricity rates need to rise.
Jung said, "Given that industrial electricity rates have surged and are difficult to raise further, it is ultimately time to increase residential and commercial electricity rates," adding, "Late December, when electricity rates for 2026 are decided, will be an important inflection point."