[Click eStock] "KEPCO KPS, Weak 1Q... This Year's Performance Expected to Be Low-High"

[Asia Economy Reporter Ji Yeon-jin] Shin Young Securities announced on the 20th that it expects KEPCO KPS's performance this year to show a pattern of lower results in the first half and higher results in the second half, maintaining a buy investment opinion and a target stock price of 50,000 won, judging that the growth trend in performance remains valid.

In the first quarter of this year, KEPCO KPS's sales are expected to decrease by 4.6% from last year to 306.7 billion won, and operating profit is forecasted to drop by 32.6% to 38 billion won. This is due to poor performance expected across all sectors except for nuclear and pumped storage divisions. In particular, in the thermal power sector, sales are expected to decline due to the decommissioning of thermal power plants such as Samcheonpo Units 1 and 2, Honam Units 1 and 2, and Ulsan Units 4 and 5.

Additionally, in the transmission and transformation sector, revenue recognition is delayed due to late settlements with clients, and the POSCO-Gwangyang maintenance project is structured such that materials are purchased and manpower is deployed early on, so the scale of revenue recognized initially is not large, according to analysis. Kwon Deok-min, a researcher at Shin Young Securities, stated, "Overall, in the first quarter of this year, revenue recognition by sector is delayed, so performance is expected to show a slowdown compared to the previous year," adding, "There are planned preventive maintenance projects carried over for Unit 2, 15 units scheduled to start construction, and 13 units expected to be completed this year." He further explained, "Planned preventive maintenance projects tend to record the largest revenue at the start of construction, and there is still potential for new project orders mainly in developing countries."

Sales for this year are projected to increase by 4.6% to 1.4 trillion won, and operating profit is expected to rise by 18.5% to 146.8 billion won.