[Click eStock] KEPCO Engineering & Construction, EPS Raised to 910 Won... Target Price Upward Revised

Shinyoung Securities on the 11th forecasted revenue growth for KEPCO Engineering & Construction due to orders in new energy businesses and the resumption of construction for Shin Hanul Units 3 and 4. Accordingly, they maintained a 'Buy' investment rating and raised the target price to 80,000 KRW.

Researcher Kwon Deok-min of Shinyoung Securities stated, "We have revised the average estimated earnings per share (EPS) for 2023-2024 upward to 910 KRW."

Researcher Kwon analyzed, "With growing global interest in nuclear power plants, expectations for overseas nuclear power plant orders continue. Considering various overseas order pools and domestic nuclear technology capabilities, we raised the target price."

KEPCO Engineering & Construction recorded first-quarter sales of 108.4 billion KRW, a 16.7% increase year-on-year, and operating profit turned positive at 10 billion KRW. Researcher Kwon diagnosed, "The sales increase was due to the nuclear power and reactor divisions recording sales of 50 billion KRW and 24.2 billion KRW, up 14.8% and 65.4% year-on-year, respectively."

The resumption of construction for Shin Hanul Units 3 and 4 drove the sales increase. The sales scale for Shin Hanul Units 3 and 4 is approximately 670 billion KRW. The period over which sales are recognized is about 10 years. The current sales progress rate is estimated to be around 10%.

The new energy business division is conducting EPC projects such as Hallim Offshore Wind Power (scheduled for late February 2025) and Hanju Combined Power Plant (scheduled to end late November).

Researcher Kwon stated, "Since they have secured an EPC project for fuel cells worth 2.2 trillion KRW, it is expected to offset future sales declines following the completion of the Hanju Combined Power Plant." He added, "Annual sales are projected to increase 14.0% year-on-year to 576.2 billion KRW, and operating profit is expected to rise 164.5% year-on-year to 36.9 billion KRW."