KEP - KEPCO: Lower SMP And Fuel Costs Better Generation Mix
Investment highlights
The system marginal price ((SMP)) is expected to fall from 2Q19 on falling oil prices and a change in the LNG taxation structure. Costs should continue to stabilize as coking coal prices remain stable. The Shin Gori unit #4 recently received permission to begin operations. Three more nuclear power plants will come online by 2020, suggesting an improvement in the generation mix. The prospect of a tariff hike is uncertain, but stabilizing costs are expected to boost earnings.
KEPCO's (KEP) earnings are at their mid/long-term lows, meaning they are slated to improve going