NH Investment & Securities on the 21st cut its target price for Korea Electric Power Corporation to 63,000 won from 68,000 won, saying profitability could slow as international oil prices rise due to the fallout from the war between the United States and Iran. It said, however, that the current share price reflects a significant portion of the negatives. Korea Electric Power Corporation closed at 37,650 won the previous day.
Researcher Lee Min-jae at NH Investment & Securities said, "As high international oil prices are expected to persist for a long time, we lowered our 2027 BPS (book value per share) estimate by 8% from the previous level," while noting the potential for mid- to long-term benefits from expanded global nuclear power investment.
Lee said, "The adjustment of roles in overseas nuclear power exports between Korea Electric Power Corporation and Korea Hydro & Nuclear Power, carried out under government mediation, has been clarified as direct investment in large nuclear plants by Korea Electric Power Corporation and EPC (engineering, procurement and construction) execution by KHNP," adding, "Entering the North American large nuclear power market is an opportunity to stand shoulder to shoulder with Russia in the global nuclear market."
Lee added, "There are criticisms that projects in the United States are being delayed due to investment holdups, but in reality the absence of participation by U.S. utility corporations is a more important issue," and said, "As the Trump administration may strongly demand investment into the United States ahead of the midterm elections, Korea's response in preparation for this is important."
Lee also said, "Korea Electric Power Corporation has the capability to replace U.S. utility corporations and, based on its experience in constructing large nuclear plants and its status as a state-owned enterprise, is securing competitive procurement interest rates," adding, "The EPC contract is also likely to proceed in a cost-plus manner, unlike in the past, reflecting increases in expenses during construction." Lee continued, "After completion, operating revenue or gains from selling equity can also be expected."