NH Investment & Securities on the 23rd said Korea Electric Power Corporation is securing strong competitiveness as the global trend of expanding investment in nuclear power is expected to strengthen due to the U.S.-Iran war. It maintained a Buy rating and a target price of 68,000 won. Korea Electric Power Corporation's previous closing price was 46,000 won.
NH Investment & Securities explained that it kept its rating and target price because, as the expansionary trend of global nuclear investment is expected to strengthen amid the war between the United States and Iran, Korea Electric Power Corporation has secured competitiveness comparable to Russia's state-owned nuclear power corporation Rosatom.
Lee Min-jae, an analyst at NH Investment & Securities, said, "Entering the North American nuclear market is an opportunity to capture both profitability and justification as an investment in the United States," and predicted, "In addition to large-scale nuclear plant construction, it will be possible to advance into small modular reactor (SMR) developers and the enrichment and reprocessing markets."
With the surge in international oil prices, a decline in this year's operating profit is inevitable, but if the Strait of Hormuz normalizes by April, it forecast that starting next year it could achieve operating profit of more than 20 trillion won—the profit level expected before the war—even without a hike in electricity rates. NH Investment & Securities estimated this year's operating profit at 13 trillion won.
Amid criticism in the United States that large-scale nuclear projects are being delayed due to investment holdups by Korea and Japan, Korea Electric Power Corporation is expected to decide on a mid- to long-term investment strategy next month.
The Trump administration is also highly likely to actively implement investment under tariff agreements before the midterm elections in November, so specific investment plans were expected to be decided in the third quarter.
The analyst said, "If Korea Electric Power Corporation participates in a U.S. large-scale nuclear project, it is expected to inject significant vitality into a market where no one is participating as a developer," adding, "Beyond the experience accumulated across multiple projects and the value chain, its competitiveness in financial markets as a state-owned corporation representing the Korean government is positive for profitability."
It explained that, unlike in the United Arab Emirates (UAE), the engineering, procurement and construction (EPC) contract is expected to proceed under the "cost plus" method, one of the U.S. Department of Energy's measures to activate the North American nuclear power market.
The analyst said, "Accordingly, capital gains on sale at completion or operating revenue will be more stable than in other regions," and added, "Starting with the North American large-scale nuclear market, regional diversification and reactor-type diversification are expected to follow."