[Click eStock] Hyundai Motor Securities "KEPCO KPS, Dividend Appeal Remains"

[Asia Economy Reporter Ji Yeon-jin] Hyundai Motor Securities announced on the 9th that it expects KEPCO KPS to maintain a dividend payout ratio of over 50% this year based on its strong cash-generating ability, setting a target stock price of 40,000 won.

KEPCO KPS's sales in the fourth quarter of last year increased by 5.8% year-on-year to 400.1 billion won, and operating profit rose by 66.2% to 23 billion won. This figure was below market expectations due to a provision of 20 billion won related to performance bonuses. In last year's results, large-scale one-time factors were reflected, including management performance provisions totaling 35 billion won in the second and fourth quarters, and 48.3 billion won (non-operating) for the establishment of the nuclear power plant decommissioning research institute in the third quarter.

This year, these one-time operating and non-operating factors are expected to be removed, and profits are anticipated to improve with the recovery of sales in the nuclear power business. Considering the dividend payout ratio remained the same as the previous year in 2020, the dividend per share is expected to be 1,090 won. Even at the current level, the dividend yield is about 4%. The dividend per share for this year is expected to be 1,862 won.

Kang Dong-jin, an analyst at Hyundai Motor Securities, said, "Although profitability has declined recently due to an increased proportion of overseas business, overseas sales are also increasing, so except for labor cost issues, it is judged that a stable profit level can be maintained," adding, "Based on stable cash flow, even if the dividend yield exceeds 50%, there is no debt and cash accumulates, so maintaining the dividend yield is fully possible."