[Market Focus] KEPCO Continues 3-Day Rally...Hits Record High

Korea Electric Power Corporation (KEPCO) continued its upward trend for the third consecutive day, reaching a new 52-week intraday high.

As of 9:12 a.m. on November 26, KEPCO was trading at 52,750 won, up 1,250 won (2.43%) from the previous day. During the session, the price climbed to 53,200 won, setting a new 52-week high.

Improved earnings and expectations for nuclear power appear to be driving the stock price higher. Eugene Investment & Securities forecast that KEPCO's earnings for next year will be 97 trillion won in revenue, on par with the previous year, 18 trillion won in operating profit, up 19%, and 11 trillion won in net profit, up 24%. Hwang Sunghyun, a researcher at Eugene Investment & Securities, said, "Raw material prices are stabilizing downward and electricity rates remain high, which will structurally improve earnings. The introduction of the Locational Marginal Pricing (LMP) system by region and the reflection of grid congestion costs in pricing are expected to lower wholesale power purchase costs. If retail LMP is introduced, it will lead to higher rates, which in turn is expected to improve return on equity (ROE) and reduce the valuation discount rate."

Jung Hyejeong, a researcher at KB Securities, noted, "With record-high earnings, entry into the U.S. nuclear power market, and potential benefits from the revision of the Korea-U.S. nuclear agreement, the revaluation of nuclear power assets is expected to trigger a full-fledged stock price re-rating as the company enters a phase of valuation normalization."