[Click eStock] Korea Electric Power Corporation, Deficit Expected to Continue This Year... Cost Increase Inevitable

[Asia Economy Reporter Hwang Yoon-joo] Ebest Investment & Securities maintained a 'Buy' rating and a target price of 26,000 KRW for Korea Electric Power Corporation (KEPCO) on the 25th, expecting the deficit to continue this year as well.

Researcher Nam Min-sik of Ebest Investment & Securities stated, "We forecast 2022 sales of 63.756 trillion KRW (YoY 5.3%) and a deficit of 920 billion KRW (OPM -14.1%)."

Researcher Nam added, "We expect the electricity sales price in 2022 to be 110 KRW/kWh and the electricity production cost to be 123 KRW/kWh," analyzing that "due to the impact of Russia's invasion of Ukraine, it will be difficult to avoid raw material price increases."

He explained, "The Q4 performance last year could not avoid the impact of rising costs," noting that "the rise in Dubai crude oil, anthracite coal, and the System Marginal Price (SMP) led to an increase in electricity production costs."

He continued, "However, historically, KEPCO's deficits have increased the possibility of electricity price hikes with a time lag," and judged that "the likelihood of electricity price increases will be high after the 20th presidential election."

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