KEP - KEPCO: Improving Generation Mix Stabilizing Costs
Investment highlights
KEPCO (KEP) suffered a massive loss in 4Q18 but the scale of the loss was smaller than expected. We believe energy price declines will be recognized into earnings from 2Q19. The construction of the Shin Gori unit #4 is scheduled to be completed in 3Q19. The Shin Hanul units #1 and #2 will also come online in 2020. At this point we are focused on the prospect of an earnings turnaround in 2020. The potential power tariff reform should provide momentum in the mid to long term.