[Click eStock] "KEPCO, Dividend Increase Expectations Remain Valid Amid Profit Improvement"

On June 11, Hanwha Investment & Securities stated that Korea Electric Power Corporation (KEPCO) is expected to see a significant improvement in profits this year, maintaining expectations for a dividend increase.

In the first quarter, KEPCO posted sales of 24.2 trillion won and operating profit of 3.75 trillion won, up 4.0% and 188.9%, respectively, compared to the same period last year. It is the first time since 2017 that the company has recorded over 3 trillion won in operating profit in the first quarter. The notable improvement in profits was driven by the continued impact of the industrial electricity rate hike implemented in October last year, an increased proportion of nuclear power generation, and the stabilization of fuel prices.

Hanwha Investment & Securities expressed expectations for a dividend increase at KEPCO. Last year, KEPCO resumed dividends for the first time in four years, with a dividend per share (DPS) of 213 won and a payout ratio of 16.5%.

Song Yurim, a researcher at Hanwha Investment & Securities, said, "Given that separate net profit showed a marked improvement from the first quarter of this year, it is reasonable to expect a dividend increase. This year and next, the consensus for controlling net profit is in the 7 to 8 trillion won range. Even without assuming further electricity rate hikes, there should be no major obstacles to normalizing the company through debt repayment and dividend increases."

Hanwha Investment & Securities maintained its buy rating and target price of 33,000 won for KEPCO.