[THE INVESTOR] Korea Electric Power Corp. is likely to remain slow, said Hana Financial Investment on Aug. 14, lowering the target price to 39,000 won (US$34.39) from 43,000 won.

Despite declining revenue from overseas, its sales in the second quarter rose 3.2 percent on-year to 13.4 trillion won. However, it turned to red with 687.1 billion won net loss due to suspended operations of aged coal-fired power plants and decline in usage of nuclear power plants. The usage rate could rise over mid-70 percent in the latter half, but commercial operations of two of them, planned for September and December, respectively, could be delayed. As a result, KEPCO will need more time to recover, said analyst Yoo Jae-seon. 

The government’s firm position regarding electricity rates is weighing down its earnings. Having chosen to ease the progressive stage system despite slow earnings, expectations for normalizing rates have been further lowered. Even factoring in outside variables, however, recovery of nuclear power plant usage alone could lift it out of red, said the analyst maintaining a “buy” recommendation. 

By Hwang You-mee (glamazon@heraldcorp.com)