[Weekly HOT Stocks] Stock Prices Fluctuate on Electricity Rate Reform Plan... Target Prices Also Raised↑

The closing price, which was 23,600 won on the 16th, ended at 28,300 won on the 18th... a 19.92% increase

[Asia Economy Reporter Kum Boryeong] As the government announced a reform plan for the electricity tariff system, Korea Electric Power Corporation (KEPCO) attracted significant market attention over the past week.

According to the Korea Exchange on the 20th, foreign investors net purchased KRW 94.6 billion worth of KEPCO shares over two days from the 17th to the 18th. During this period, KEPCO ranked first among the top net purchase stocks by foreign investors in the KOSPI market.

The Ministry of Trade, Industry and Energy and KEPCO finalized and announced the electricity tariff system reform plan on the 17th. The existing tariff system, which consisted of a basic charge and electricity consumption charge, was revised to separately distinguish fuel cost adjustment charges and climate environment charges, reflecting costs and external expenses.

Choi Go-woon, a researcher at Korea Investment & Securities, explained, "This marks a turning point for KEPCO to escape the policy victim frame. Of course, the appropriate investment return, which is the basis of the tariff system, remains unclear, and environmental costs are not immediately imposed on the tariff. Accordingly, operating profit in 2021 is unlikely to increase beyond this year's level. However, for KEPCO and other utility companies, the direction of energy policy is more important than short-term profits and losses. This reform increases KEPCO's profit stability, so it is considered an opportunity for revaluation."

Following the announcement of the reform plan, the stock price showed an upward trend. The closing price was KRW 23,600 on the 16th, rising 10.17% (KRW 2,400) to KRW 26,000 on the 17th. On the 18th, it closed at KRW 28,300, up 8.85% (KRW 2,300). This represents a 19.92% increase over two trading days.

Brokerages raised their target prices for KEPCO. Korea Investment & Securities raised its target from KRW 30,000 to KRW 38,000, Hana Financial Investment from KRW 30,000 to KRW 39,000, and Eugene Investment & Securities from KRW 32,000 to KRW 43,000.

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