Korea Electric Power Hits 52-Week High - Analyst Blog

Shares of Korea Electric Power Corp. KEP hit a 52-week high of $19.12 on Apr 11. The shares closed at $19.07 at the end of trading, reflecting a solid return of 45.5% over the past one year. Average volume of shares traded over the last three months came in at 243,948.

Korea Electric Power, a Zacks Rank #3 (Hold) stock, reported in the green in the fourth quarter of 2013 as well as in 2013. The company turned profitable for the first time in 2013 since 2007. The impressive results were driven by both higher power sales and expansion of overseas business.

Korea Electric Power is one of the leading suppliers in Korea's electricity sector. The company is now working on several important projects, including Shin-Wolsong Unit 2, Shin-Kori Units 3 & 4 and Shin-Ulchin Units 1 & 2, Yeongheung Thermal Power Plant Units 5 & 6, and Seoul Combined Cycle Power Plant Units 1 & 2.

The company expects Shin-Kori Units 3 & 4 to begin operations in the second half of 2014 or the first half of 2015. The scheduled completion of these projects will help the company to meet higher projected power demand.

The company is well-positioned to capitalize on the growth opportunities in the electricity sector. Moreover, it has sufficient capacity to meet near-term demand and is also focused to increase its supply by building additional coal and nuclear capacity. It expects capital expenditure of KRW 20.4 trillion, KRW 18.7 trillion and KRW 17.1 trillion in 2014, 2015 and 2016, respectively.

Apart from the domestic business the company is continuously working on the expansion of its overseas business in China, Saudi Arabia, the Philippines and United Arab Emirates. The company currently operates 42 projects in 21 countries. The company's main focus is to increase its revenue from overseas projects to KRW 29.4 trillion by 2020. These overseas businesses will boost the company's cash inflow, thereby balancing country-specific risks.

Others Stocks to Consider

Some other better-ranked stocks in the same sector include NRG Energy, Inc. NRG, Public Service Enterprise Group Inc. PEG and Otter Tail Corp. OTTR. All of these stocks hold a Zacks Rank #1 (Strong Buy).