Investment highlights
KEPCO’s (KEP) 1Q19 results missed consensus due to weak power sales and deteriorating profitability overseas. The System Marginal Price ((SMP)) fell to KRW30/kWh and nuclear utilizations rose considerably. With this in mind, we expect losses to narrow QoQ in 2Q19. The completion of the Shin Gori nuclear power unit #4 and Shin Hanul nuclear power unit #1 will help improve the generation mix. Considering the drop in parent earnings, we do not expect KEPCO to pay out dividends this year. Even without a tariff hike, stabilizing costs should continue to shore