[Click eStock] "KEPCO KPS, Earnings Growth and Czech Nuclear Plant Optimism"

On the 7th, Eugene Investment & Securities analyzed that KEPCO KPS has performance growth and expectations for Czech nuclear power plants.

KEPCO KPS recorded sales of 428.6 billion KRW, operating profit of 74.4 billion KRW, and net profit of 59.5 billion KRW in the second quarter of this year, representing increases of 5%, 52%, and 46% respectively compared to the same period last year. This is an earnings surprise exceeding market consensus.

Hwang Seong-hyun, a researcher at Eugene Investment & Securities, stated in a report on the day, “The decrease in planned preventive maintenance volume for thermal power (-4 units) had a significant impact,” and “On the other hand, nuclear power volume increased, and considering the annual target of 23 units (+9 units), the current trend is expected to continue.”

Additionally, researcher Hwang analyzed, “Transmission and transformation are expected to see a structural increase in infrastructure aging and repair performance, which is positive,” and “On the cost side, the volume of nuclear power increased, improving the cost ratio by 5.4 percentage points, and considering that labor costs related to the management evaluation performance announced in the first half (estimated annual total of 20 billion KRW) are reflected, the performance is quite favorable.”

He continued, “Recently, strong financial structure improvements have been promoted mainly among public enterprises and public institutions, leading to continued cost control. Considering the selection of the preferred bidder for the Czech nuclear power plant project, future new nuclear power plant orders, and dividend payout ratio (historically up to 60%), the investment attractiveness is high.”