Korea Electric Power Corporation's stock has soared to a record high not seen in over seven years. The expected benefits from the so-called 'nuclear renaissance' through its 100% subsidiary, Korea Hydro & Nuclear Power, are cited as the main reason for the stock price increase.
Korea Electric Power Corporation shares were traded at 38,300 won on the KOSPI market at 9:03 a.m. on the 25th. The stock price increased by 12.32% (4,200 won) compared to the previous day. It also rose to 38,550 won at the beginning of trading. This is the first time that Korea Electric Power Corporation's stock has exceeded 38,300 won since May 2018.
Mun Kyung-won, a researcher at MERITZ Securities, assessed that the nuclear boom is the driving force behind the rise in Korea Electric Power Corporation's stock price. There may be conflicts over export leadership between Korea Electric Power Corporation and KHNP, but since KEPCO holds 100% equity in KHNP, they can be viewed as one entity from the perspective of stock investment.
In particular, if 'Team Korea,' centered around Korea Electric Power Corporation and KHNP, maintains its competitiveness in the overseas nuclear power market, there are opportunities for large-scale orders, said Mun. He noted, 'From the late 2020s to 2050, global large-scale nuclear power construction is expected to exceed 20 gigawatts (GW) annually,' adding, 'If Team Korea secures just one project (at 2.8 GW) per year, Korea Electric Power Corporation or KHNP can secure orders worth over 20 trillion won annually.'
Additionally, Korea's small modular reactor (SMR) is under development with the goal of obtaining standard design approval by 2028. This could open a new export avenue.
Korea Electric Power Corporation's core business in the power sector has also passed a hurdle following the ceasefire between Israel and Iran, which has led to a drop in international oil prices. Seong Jong-hwa, a researcher at LS Securities, assessed that Korea Electric Power Corporation had been in an extremely undervalued state regarding its valuation, but if there are electricity rate hikes to secure funding for power network development in the future, a re-evaluation may be possible.
Seong raised Korea Electric Power Corporation's target stock price from 38,000 won to 42,000 won, stating, 'There is a possibility that expectations for electricity rate hikes in the fourth quarter, which is typically a low season for electricity, and expectations for normalizing dividends may simultaneously take effect around the end of the third quarter (July to September).'