[Market Focus] KEPCO Surges Over 16% on Expectations of Earnings Recovery This Year

Korea Electric Power Corporation (KEPCO) is showing strong performance on June 24. Despite the announcement of a freeze in electricity rates for the third quarter, investor sentiment appears to have recovered as expectations for a rebound in this year's earnings have emerged.

As of 1:31 p.m. on this day, KEPCO shares were trading at 32,950 won on the Korea Exchange, up 16.64% from the previous trading day. After opening at 29,450 won, the stock has been gradually trending upward.

On this day, Jung Hyejeong, a researcher at KB Securities, stated, "KEPCO's earnings improvement this year is expected to be achieved regardless of the quarterly fuel cost adjustment rate," and added, "While electricity rates have remained unchanged since the end of last year, international energy prices have declined compared to the previous year, which is leading to an improvement in KEPCO's margins."

The previous day, KEPCO announced that it would freeze the fuel cost adjustment rate for the third quarter at 5 won per kWh (kilowatt-hour). The fuel cost adjustment rate is determined by reflecting changes in fuel costs, such as bituminous coal and liquefied natural gas (LNG), over the three months preceding the applicable quarter. In addition to the fuel cost adjustment rate, other fees such as the basic charge, electricity usage charge, and climate environment charge were also not increased, resulting in an overall freeze in electricity rates for the third quarter.