[Click eStock] "KEPCO KPS, Dividend Appeal Expands Amid Operating Profit Improvement"

[Asia Economy Reporter Oh Ju-yeon] KB Securities analyzed that Korea Plant Service & Engineering (KEPCO KPS)'s operating profit this year will meet market consensus, and as operating profit increases until 2023, its dividend appeal will also rise.

On the 2nd, KB Securities forecasted that KEPCO KPS's sales this year will increase by 2.4% from the previous year to 1.3 trillion KRW, and operating profit will decrease by 2.2% to 189.8 billion KRW. Net income attributable to controlling shareholders is expected to decrease by 4.7% to 146.2 billion KRW compared to the previous year. This estimated operating profit level aligns with market consensus.

The operating profit margin is expected to improve from 14.9% in 2020 to 15.6% in 2023. This is because while the growth rate of labor cost per employee is limited, sales per employee are increasing relatively quickly, reducing the burden of fixed costs.

It was explained that the high dividend payout ratio will contribute to expanding KEPCO KPS's dividend appeal along with the increase in operating profit.

Researcher Jung Hye-jung said, "KEPCO KPS has maintained a high dividend payout ratio of 50% over the past three years," adding, "If this trend continues, KEPCO KPS's dividend per share (DPS) is expected to steadily increase from 1,920 KRW in 2019 to 2,100 KRW in 2023." This suggests a relatively high dividend yield can be expected.

Researcher Jung also stated, "As domestic nuclear and thermal power plant capacity increases and maintenance of UAE nuclear power plants began in earnest from 2021, KEPCO KPS's sales will increase," and "Operating profit is expected to rise from 189.8 billion KRW in 2020 to 215.9 billion KRW in 2023."

Accordingly, a 'Buy' investment rating and a target price of 38,000 KRW were presented for KEPCO KPS. The upside potential compared to the previous day's closing price (31,650 KRW) is 20.1%.

This content was produced with the assistance of AI translation services.