Daishin Securities on the 23rd lowered its target price for KEPCO KPS from 72,000 won to 64,000 won while maintaining a 'buy' investment rating. The brokerage cited the Bank of Korea's interest rate increases and delays in K-nuclear power plant entry to the US market as reasons for the adjustment. Analyst Heo Min-ho stated the recent stock price decline presents a buying opportunity, expecting continued Q2 earnings improvement and year-end re-evaluation momentum. KEPCO KPS currently trades at a price-to-earnings ratio of 12x based on 2026 forecasts, representing a 25% discount to its 2011-2025 average PER of 17x.
Daishin Securities Forecasts Q2 and Full-Year 2026 Earnings
Daishin Securities projected Q2 revenue of 458.7 billion won (up 1% year-on-year) and operating profit of 67.3 billion won (up 3%). For full-year 2026, the brokerage forecast revenue of 1.65 trillion won (up 5%), operating profit of 192.2 billion won (up 37%), and an operating profit margin of 11.6% (up 2.7 percentage points). The firm stated it adjusted the target price to reflect the realization of the 6-month target price, considering current market conditions.
Analyst Cites 12th Electricity Plan and US Nuclear Market as Re-evaluation Catalysts
Daishin Securities identified the 12th electricity plan and K-nuclear power plant entry to the US as key re-evaluation catalysts. The brokerage also highlighted dividend attractiveness, with an expected 2026 dividend per share of 2,310 won, yielding 5.3% based on the current stock price. Analyst Heo stated, "If a Korea-US nuclear agreement is concluded in the second half, discussions on K-nuclear power plant entry to the US market will become more concrete." He added that while benefits may be limited for US-type reactors, Korean-type reactors (APR1400, AP1000) could potentially enter the market in the mid-to-long term. The analyst noted that in 2027, discussions on whether to proceed with the nuclear power plant project between the Korean and Vietnamese governments will be finalized, and exports of K-nuclear power plants to multiple countries will gain momentum.
Estimated 31.3GW New Power Generation Capacity Needed by 2040
According to Daishin Securities' analysis of the government's recently announced 'Republic of Korea Great Leap Forward 3 Major Mega Projects,' the increase in electricity demand compared to the 11th plan is estimated at 30GW (the 11th plan reflected 10GW supply to the Yongin semiconductor cluster). The brokerage stated that if electricity demand forecasts for other sectors remain the same as in the 11th plan and assuming a reserve margin of 22%, the additional effective generation capacity required by 2040 is 36.2GW. Excluding the 13.6% share of renewable energy (renewable energy, ESS, hydrogen turbines, fuel cells, etc.) reflected in the 11th plan, the new generation capacity for nuclear power, LNG, and pumped-storage hydroelectricity is estimated at 31.3GW. Daishin Securities noted, "Considering KEPCO KPS's market share by power source, it may be possible to secure 27-29GW of new maintenance generation capacity. This means that domestic maintenance generation capacity can grow at an average annual rate of 2.5-3.0% by 2040, and maintenance revenue can grow stably by more than 5%, acting as momentum to resolve mid-to-long-term concerns about revenue growth due to coal power plant closures."
FAQ
Why did Daishin Securities lower KEPCO KPS target price to 64,000 won?
Daishin Securities lowered the target price from 72,000 won to 64,000 won to reflect the Bank of Korea's interest rate increases and delays in K-nuclear power plant entry to the US market. The brokerage maintained a 'buy' rating and stated the recent stock price decline presents a buying opportunity.
What are Daishin Securities' 2026 earnings forecasts for KEPCO KPS?
Daishin Securities forecast Q2 2026 revenue of 458.7 billion won (up 1% year-on-year) and operating profit of 67.3 billion won (up 3%). For full-year 2026, the brokerage projected revenue of 1.65 trillion won (up 5%), operating profit of 192.2 billion won (up 37%), and an operating profit margin of 11.6%.
What catalysts did Daishin Securities identify for KEPCO KPS re-evaluation?
Daishin Securities cited the 12th electricity plan and K-nuclear power plant entry to the US market as key re-evaluation catalysts. The brokerage estimated that 31.3GW of new generation capacity for nuclear power, LNG, and pumped-storage hydroelectricity will be needed by 2040, potentially enabling KEPCO KPS to secure 27-29GW of new maintenance generation capacity.
