KEP  Korea Electric Power Corporati...

Exchange

NYSE

Sector

Public Utilities

Industry

Electric Utilities: Central

Market Cap.

22.87B

Vuru Grade

35.46/100

Current Price

$17.81
-0.41 (-2.25%)

Growth Price

$70.13
Undervalued by 293.79%

Company Metrics

  • P/E 5.92
  • P/S 0.45
  • P/B 0.37
  • EPS 3.01
  • Cash ROIC -1.72%
  • Cash Ratio 0.23
  • Dividend 0 / 0%
  • Avg. Vol. 375,318.00
  • Shares 1.28B
  • Market Cap. 22.87B

Company Description

Korea Electric Power Corporation, an integrated electric utility company, engages in the generation, transmission, and distribution of electricity in Korea. The company generates power from nuclear, coal, oil, liquefied natural gas, hydro, wind, and solar sources. As of December 31, 2010, it operated 487 generation units, including nuclear, thermal, hydroelectric, and internal combustion units wit... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Korea Electric Power Corp. ADR
Wall Street Journal - Feb 11, 2011
News Korea Electric Power Corp. ADRKEP. Significant News Only. 08/09/17; Press Release. Technical Insights on Electric Utilities Stocks -- COPEL, Enel Americas, Korea Electric Power, and NextEra Energy.
The Market Is Wrong About KEPCO
Seeking Alpha - Mar 31, 2017
Every time I look at Korea Electric Power Corp., or KEPCO, (NYSE:KEP), I cannot help but think it is a great business hostage of Mr. Market's fears.
Korea Electric Power Stock Can Surge 40%
Barron's - Dec 3, 2014
Korea Electric Power, or Kepco, as it is known, owns the majority of the electricity generating capacity in Korea, and is a big buyer of fuels such as liquefied natural gas (LNG), coal, and oil for power generation.
Is Korea Electric Power Corporation (ADR) (KEP) Worthy of Your Portfolio?
Insider Monkey (blog) - Dec 14, 2016
Hedge funds are not perfect. They have their bad picks just like everyone else. Valeant, a stock hedge funds have loved, lost 79% during the last 12 months ending in November 21.
Analysts See $-0.44 EPS for Renewable Energy Group (REGI); 0 Analysts Covering ...
UtahHerald.com - Oct 22, 2017
Korea Electric Power had 6 analyst reports since August 26, 2015 according to SRatingsIntel. Bank of America upgraded the shares of KEP in report on Monday, November 21 to “Neutral” rating.
Is Korea Electric Power Corp (NYSE:KEP) Now a Sell? Why did Goldman Sachs ...
BZ Weekly - Sep 27, 2017
More notable recent Korea Electric Power Corporation (ADR) (NYSE:KEP) news were published by: Nasdaq.com which released: “Korea Electric Power Corporation Common Stock Quote & Summary Data” on August 22, 2011, also Benzinga.
Will Investors Now Sell Korea Electric Power Corp (NYSE:KEP) Stock Following ... - Weekly Register
Goldman Sachs May Have Just Lost Faith in Korea Electric Power Corp (NYSE:KEP) - Press Telegraph
Mid-Afternoon Market Update: Crude Oil Down 1.25%; Alcobra Shares Spike Higher
Nasdaq - Oct 19, 2017
Meanwhile, top gainers in the sector included Korea Electric Power Corporation (ADR) (NYSE: KEP ), up 3 percent, and Pure Cycle Corporation (NASDAQ: PCYO ), up 2 percent.
Korea Electric Pwr (KEP) Position Raised by Silchester International Investors Llp
Weekly Register - Oct 17, 2017
More important recent Korea Electric Power Corporation (ADR) (NYSE:KEP) news were published by: Nasdaq.com which released: “Korea Electric Power Corporation Common Stock Quote & Summary Data” on August 22, 2011, also Seekingalpha.
Cogint, Inc. (COGT) Reaches $4.72 After 9.00% Up Move; Korea Electric Power ... - Bibeypost.com
Needham Investment Management Lowered Its Position in Quinstreet (QNST) by ... - FlintDaily.com
Korea Electric Power (ADR) (KEP) Reaches $17.93 After 9.00% Up Move; Landscape ...
FlintDaily.com - Oct 19, 2017
Korea Electric Power Corporation (ADR) (NYSE:KEP) has declined 25.10% since October 19, 2016 and is downtrending. It has underperformed by 41.80% the S&P500.
Korea Electric Power Corporation (NYSE:KEP) Shorted Shares Increased 55.47 ...
WeeklyHub - Oct 3, 2017
More recent Korea Electric Power Corporation (ADR) (NYSE:KEP) news were published by: Barrons.com which released: “Korea Electric Power Stock Can Surge 40%” on December 03, 2014.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for KEP to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate KEP's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$17.81 Current Price

$70.13 Growth Price (DCF)

Undervalued by 293.79%


Growth Rate Assumed by Market: -500.00%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$0.02 Book Price

Overvalued by 99.89%


Very Poor Cash Return on Invested Capital over the past 5 years

KEP has failed to generate positive returns on its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

KEP has lost $1.72 of cash for every $100 invested.
Figures in KRW. Fiscal year ends in December
20122013201420152016
Free Cash Flow -7.60T -7.44T -2.57T 2.81T 4.37T
divided by
Invested Capital 124.72T 132.64T 140.14T 143.43T 147.37T
Cash ROIC -6.09% -5.61% -1.83% 1.96% 2.96%

Poor Return on Equity over the past 5 years

KEP has shown an inability to deliver strong results for shareholders. This could be due to poor management, KEP operating in a highly competitive industry, or having a weak business in general.

KEP has only generated $5.90 of Earnings for every $100 of Shareholders' Equity.
Figures in KRW. Fiscal year ends in December
20122013201420152016
Net Income -3.08T 174.31B 2.80T 13.42T 7.15T
divided by
Stockholders' Equity 49.89T 50.26T 53.60T 66.63T 71.72T
Return on Equity -6.17% 0.35% 5.22% 20.13% 9.97%

Poor Business Performance over the past 10 years

KEP's inability to produce positive free cash flow for the majority of the past 10 years is concerning. It should be a red flag, since this company does not have a track record of delivering results for shareholders. This could be due to poor management or the nature of its business.

KEP has been losing money for the majority of the past 10 years.
Figures in KRW. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow -1.56T -6.96T -5.51T -5.18T -6.51T -7.60T -7.44T -2.57T 2.81T 4.37T

Weak Balance Sheet

KEP's financial position is not ideal. The key is to check whether KEP is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in KRW. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 1.57T 1.78T 2.00T 2.67T 1.39T 2.61T 2.67T 1.97T 9.12T 5.72T
Current Assets 9.34T 10.34T 11.03T 12.39T 14.13T 13.93T 15.27T 16.82T 22.03T 19.71T
Total Assets 82.95T 88.20T 93.21T 99.61T 136.47T 146.15T 155.53T 163.71T 175.26T 177.84T
Current Liabilities 9.34T 10.54T 10.75T 11.59T 17.74T 18.82T 20.21T 21.60T 22.71T 24.74T
Total Liabilities 38.91T 46.92T 52.18T 58.59T 83.20T 96.26T 105.27T 110.11T 108.62T 106.11T
Stockholder' Equity 44.04T 41.27T 41.03T 41.02T 53.27T 49.89T 50.26T 53.60T 66.63T 71.72T
Current Ratio 1.00 0.98 1.03 1.07 0.80 0.74 0.76 0.78 0.97 0.80
TL-to-TA 0.47 0.53 0.56 0.59 0.61 0.66 0.68 0.67 0.62 0.60

Consistent Reinvestment of Profits over the past 10 years

KEP has consistently retained profits. This may put KEP in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, KEP can greatly improve their long-term economic picture.
Figures in KRW. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 26.93T 23.50T 23.41T 23.33T 35.77T 5.00T 8.41T 35.30T 22.86T 19.72T
Retained Earnings Growth - -12.73% -0.41% -0.31% 53.30% -86.02% 68.21% 319.83% -35.24% -13.74%

Highly Competitive Industry over the past 10 years

It's likely that KEP is in an industry with low barriers to entry, spurring high competition. If Gross Margins are at least satisfactory, it's likely KEP invests heavily in R&D and Sales, General & Administrative expenses.

Only $2.13 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in KRW. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 1.43T -2.96T -96.72B -72.16B -3.29T -3.08T 174.31B 2.80T 13.42T 7.15T
divided by
Revenue 29.15T 31.56T 33.99T 39.43T 43.53T 49.12T 53.71T 57.12T 58.58T 59.76T
Net Profit Margin 4.90% -9.36% -0.28% -0.18% -7.56% -6.27% 0.32% 4.90% 22.90% 11.96%

Erratic Gross Profit Margins over the past 10 years

KEP has had highly erratic gross profit margins which are a great cause for concern. This company may operate in a highly volatile industry, or it may just have poor performance. Look at reasons for this inconsistency to understand if there is any reason to look past it.
Figures in KRW. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 26.56T 24.68B 15.47T 15.93T 43.53T 661.25B 3.12T 7.36T 13.12T 14.21T
divided by
Revenue 29.15T 31.56T 33.99T 39.43T 43.53T 49.12T 53.71T 57.12T 58.58T 59.76T
Gross Margin 91.13% 0.08% 45.51% 40.40% 100.00% 1.35% 5.80% 12.88% 22.40% 23.78%

High Capital Intensity over the past 10 years

KEP spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

1,923.33% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in KRW. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 8.55T 8.92T 11.24T 10.81T 10.65T 11.51T 14.33T 14.62T 14.14T 12.15T
divided by
Net Income 1.43T -2.96T -96.72B -72.16B -3.29T -3.08T 174.31B 2.80T 13.42T 7.15T
Capital Expenditure Ratio 599.02% -301.98% -11,625.75% -14,986.60% -323.50% -374.10% 8,220.06% 522.20% 105.38% 170.01%

Very Strong Dividend History over the past 10 years

KEP has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests KEP is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in KRW. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid 641.81B 492.29B 45.92B 32.50B 44.66B 55.25B 58.27B 203.45B 426.34B 2.10T
divided by
Shares Outstanding 1.26B 1.25B 1.25B 1.25B 1.22B 1.25B 1.25B 1.25B 1.28B 1.28B
Dividend Paid Per Share 0.46 0.36 0.03 0.02 0.03 0.04 0.04 0.15 0.30 1.48
Price at Year End 21.14 11.47 14.60 13.41 10.98 13.94 16.44 19.55 21.25 18.48
Dividend Yield 2.17% 3.11% 0.23% 0.18% 0.30% 0.29% 0.26% 0.75% 1.41% 8.00%

History of Stock Buybacks over the past 10 years

KEP has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in KRW. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 1.26B 1.25B 1.25B 1.25B 1.22B 1.25B 1.25B 1.25B 1.28B 1.28B
Stock Bought Back - 1.38% - - 2.31% -2.32% - -0.53% -2.43% -
Share your thoughts about KEP

Sign Up or Log In to start contributing!


Discussion

Nothing here yet. Be the first to post!