Korea Electric Power Corp. (KEPCO) shares fell 11 percent to close the first day of trading of this year at 19,350 won as its plan to increase electricity rates in the first quarter fell short of expectations.

South Korean analysts are scrambling to release reports with pessimistic views toward KEPCO’s increase rate for power bills as the market expected a bigger increase than was announced.

Park Kwang-rae, an analyst at Shinhan Financial Group, said, “the power bill is set to increase by 13.1 won ($0.01) per kilowatt hour (kWh), which is just a quarter of the recommended annual increase of 51.6 won that was submitted to the National Assembly.”

In his report last month, Securities Co. anayst Na min-sik said, “a 29 won hike would meet the market expectations, considering the electricity bills for last year.”

KEPCO shares started last year at around 22,000 won and fell to 16,000 won as of October as the financial health of the company was in jeopardy due to losses. However, the stock rose by 35% over the last two months on expectations that power fees will increase in 2023.

Despite the recent planned hike falling short of expectations, some analysts project additional hikes this year.

Lee Min-jae, an NH Investment & Securities Co analyst, said, “this planned hike seems reasonable, as KEPCO can raise prices further for the rest of three quarters. KEPCO shares will likely remain one of the most preferred stocks in view of several factors, such as potential fee hikes and declines in commodity prices.”

By Kang In-seon and Han Yubin

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