Korea Electric Power Corporation (KEPCO) is showing strong performance early in the trading session, buoyed by expectations of improved earnings following peace prospects between the U.S. and Iran. The easing of geopolitical risks in the Middle East is believed to be stimulating investor sentiment by potentially stabilizing energy prices.
According to the Korea Exchange, as of 10:11 a.m. on June 17, KEPCO's stock was trading at 41,150 won, up 1,350 won (3.39%) from the previous trading day. The stock opened at 40,800 won and rose to as high as 43,100 won during the session.
Market attention is focused on the upcoming official signing ceremony for a memorandum of understanding (MOU) between the U.S. and Iran, scheduled for June 19 in Switzerland. Should peace be realized, there are expectations for reduced fuel costs due to stabilized international oil and liquefied natural gas (LNG) prices, which would enhance KEPCO's earnings outlook.
LS Securities maintained a 'Buy' rating on KEPCO and raised its target price from 50,000 won to 62,000 won. The firm believes that as the conflict in the Middle East approaches resolution, the investment appeal that existed before the war will be highlighted once again.
Seong Jong-hwa, a researcher at LS Securities, stated, "As we enter a phase of peace in the Middle East, we expect a recovery of investment momentum and normalization of value that existed prior to the war. There is a possibility that the stock, which plummeted due to the conflict, could recover rapidly."
In the medium to long term, an increase in the share of nuclear power generation is also expected to contribute to improved earnings. Seong noted, "In the second half of the year, nuclear plants that have completed scheduled maintenance will gradually return to operation, and commercial operations of the Shin Kori Units 3 and 4 are also planned. We anticipate profitability improvements due to the increased share of nuclear power generation."
LS Securities estimates KEPCO's revenue for this year at 98.715 trillion won and operating profit at 9.5 trillion won. They project that by 2027, revenue will reach 102.906 trillion won, with operating profit increasing to 14.966 trillion won, indicating a continued improvement in performance.
* This article has been translated by AI.
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