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KEP - Korea Electric Power: Multiple Headwinds Justify Historically Low P/B
Korea Electric Power Corporation
Elevator Pitch
Korea Electric Power Corporation (KEP) [015760:KS], or KEPCO, currently trades at 0.23 times P/B, representing a new seven-year historical low P/B. In the past 15 years, KEPCO has only traded below 0.3 times P/B in the 2011-2012 period. This is not unreasonable, considering that KEPCO had become loss-making again since FY2018.
I think that KEPCO's historically low P/B valuation is justified on the basis that the company is hit by multiple headwinds. These include lower nuclear power plant utilization, higher costs associated with renewable energy certificates and carbon credits, a potential