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Korea Electric Power: Tariff Hike And Hydrogen Economy Plans Draw Attention

Jan. 04, 2022 11:01 AM ETKorea Electric Power Corporation (KEP)5 Comments


  • Korea Electric Power is raising its tariffs by +5.6% this year, which could potentially increase fiscal 2022 operating income by as much as KRW3 trillion.
  • South Korea wants hydrogen to be the main energy source for the country by 2050, and Korea Electric Power could potentially be involved in hydrogen production in the future.
  • Korea Electric Power remains a Buy, with its shares trading at a fifth of book value.
  • Looking for more investing ideas like this one? Get them exclusively at Asia Value & Moat Stocks. Learn More »

Aerial view of city Seoul at night, South Korea,

GoranQ/E+ via Getty Images

Elevator Pitch

I maintain my Buy investment rating for Korea Electric Power Corporation (NYSE:KEP) [015760:KS]. My previous article for the company was published on October 18, 2021, where I discussed the potential for future tariff hikes.

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This article was written by

The Value Pendulum profile picture

The Value Pendulum is an Asian equity market specialist with over a decade of experience on both the buy and sell sides.

He is the author of the investing group Asia Value & Moat Stocks, providing ideas for value investors seeking investment opportunities listed in Asia, with a particular focus on the Hong Kong market. He hunts for deep value balance sheet bargains and wide moat stocks and provides a range of watch lists with monthly updates within his investing group.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (5)

What will the new election results do here ??
mdfuller_OR profile picture
I wanted to love this company as I see SKorea as leader in next phase of digitization .,, but the narrative here just can’t me to part with my capital - long ST however
100% bc the government is the largest shareholder and those aren't companies built of capitalism and maximizing profits. This dawg has traded well below book value for decades.
I have a hard time following your logic. First, if they get involved with hydrogen production, they probably also get uninvolved in their declining traditional utility business. Second, what does "get involved in hydrogen production" (mandated by the government) mean? Doesn't sound very promising in terms of being innovative, competitive, or creating shareholder value. They are not and don't appear to ever want to be in the business of making money.
Agree on your assessment.
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