Korea Electric Power Corp. (KEPCO), South Korea’s state-run utility company, is expected to benefit from normalization of nuclear power after the government gave the go-ahead to resume the construction of two nuclear reactors that had been suspended as part of the government’s nuclear phase-out policy.

President Moon Jae-in said on Sunday he would “restart the construction of Shin Kori 5 and 6 reactors as soon as possible” after receiving the recommendation report from a civilian commission last Friday.

The president had halted the construction of the two reactors three months ago and formed a civilian-led commission to gauge public opinion before permanently halting them in line with the government’s plan to wean the country off nuclear power.

Survey results from the commission showed that 59.5 percent was for resumption.

KEPCO shares are poised for a rebound as no further upsets are expected down the road.

Its shares have been underperforming amid uncertainties under the government’s new energy policy with its forward price-to-book ratio at 0.34 times and price-earnings ratio 6.03 times.

“Government plans to cease the construction of the two nuclear reactors and eight coal-fired plants and to expand renewable energy had upset the market used to traditional energy sources,” said Lee Min-jae, an analyst at NH Investment & Securities Co.

According to data provider FnGuide, the market consensus for KEPCO’s fourth-quarter consolidated operating profit is an estimated 1.59 trillion won ($1.41 billion), up 26.1 percent on year. Revenue is forecast to slip 2.7 percent to 14.9 trillion won but net profit estimated to surge 246.1 percent to 967.3 billion won.

A rosier outlook for next year is also helping to buoy KEPCO’s stocks. Its operating profit for 2017 is estimated to be 6.89 trillion won, down 42.6 percent from the previous year. Sales would be down 2.2 percent to 58.9 trillion won and net profit down 45.2 percent to 3.92 trillion won. But earnings are expected to improve next year, rising 16.9 percent to 8.05 trillion won. Sales are projected to increase 2.4 percent to 60.3 trillion won and net profit to expand 17.2 percent to 4.59 trillion won.

Nuclear power generation in Korea is expected to increase next year as three new reactors will become operational and help KEPCO’s income and share prices.

The unit cost of generating 1 percent of electricity is 41.6 billion won for nuclear power, compared with 753.6 billion won needed to run a fossil-fueled power station.

Shares of KEPCO closed Monday down 1.7 percent at 40,400 won.

By Ko Min-suh and Kim Hyo-jin

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]