[Click eStock] KEPCO, Target Price Downgraded... Oil Price Pressure

[Asia Economy Reporter Junho Hwang] Hyundai Motor Securities has lowered the target price of Korea Electric Power Corporation (KEPCO), which recorded an earnings surprise in the fourth quarter of last year, to 27,000 KRW.

KEPCO achieved sales of 14.7 trillion KRW in the fourth quarter of last year (a 1.7% decrease compared to the previous year) and an operating profit of 933.7 billion KRW (turning to a profit compared to the previous year), exceeding market expectations.

However, the recent rise in oil prices is significant. In the second half of this year, when the increase in oil prices is reflected, rates will need to be raised, but it is expected that raising rates will not be easy under the current government. Due to the fuel cost year system, KEPCO reduced rates by 3% starting last month.

Kang Dongjin, a researcher at Hyundai Motor Securities, said, "If dividends this year are expected to be around 1,000 to 1,200 KRW, the possibility of further stock price decline at the current price level is not high, but there is also a lack of momentum for the stock price to rise," adding, "Uncertainty should be confirmed during the period in the second half of this year when the increase in oil prices is reflected."