Kyobo Securities on the 15th said KEPCO KPS can be expected to increase its domestic pipeline and expand its overseas pipeline. It maintained its recommendation at "buy" (BUY) and raised its target price to 66,000 won from 58,000 won. The previous day's closing price was 56,900 won.
KEPCO KPS's consolidated revenue in the first quarter of this year was 352.4 billion won, and operating profit was 37.0 billion won, up 22.4% and 374% year over year, respectively.
Kyobo Securities analyzed that KEPCO KPS increased revenue year over year in the first quarter of this year as it carried out planned preventive maintenance work for the No. 13 nuclear unit.
Lee Sang-ho, a Kyobo Securities researcher, said, "Maintenance on nuclear power plants is estimated to have increased and, as a relatively high-margin business, likely contributed to profit," adding, "The external segment saw a sharp improvement in revenue thanks to performance improvement work at POSCO Gwangyang."
The researcher expected KEPCO KPS's revenue this year to continue rising as planned preventive regular work increases for both nuclear and thermal power. For nuclear, planned preventive maintenance is set to increase from 13 units to 20, and for thermal power, from 86 units to 97.
Lee said, "In the second quarter of this year, planned preventive maintenance for nuclear power will cover seven units, so the number of units on which actual maintenance is performed will remain high in the first half," adding, "While unit prices for turbine equipment are expected to continue rising, overall profit is likely to increase thanks to stabilized labor costs."
Lee added, "For the overseas nuclear project, Romania's Cernavodă life-extension project could generate early revenue next year, and there is also expectation for an order at the Czech Dukovany nuclear plant in the second half of this year."