KEP [Archive]

**bdcmm** Mon Jul 16, 2007 11:46 am

KEP
Blast,

KEP seems to be an undervalued utility stock worth looking at:

- Current price < book value (huge utility grid asset)
- huge cash flow from operations (1/4 of market cap), though most of it has been re-invested into the business as capEx
- Good mixture of fuel (less dependent of any single source of fuel)
- Monopoly in South Korean electricity market means stable outlook in a stable business
- Currently looking to expand its business to other Asian countries
- Moody's is considering to upgrade Korean government rating, and Buffet's investment in PKX (Korean steel company) means that he is comfortable with South Korea
- Could benefit from continuing Korean currency appreciation against US dollar

Overall it looks very attractive for long-term holding.

Thanks.

**blast_investor** Thu Jul 19, 2007 9:20 pm

Hi bdcmm

Yes, this stock KEP looks very attractive, particularly the
low price to book ratio (< 1), and low EV/EBITDA ratio.

**zhang242463** Thu May 08, 2008 12:06 pm

KEP looks attractive, cash flow / market cap is 1/2. Why it dropped so low? It seems to pay dividend as well.

ok, got the filing and it appeared they are nearly break even rather than making 8bln per yahoo finance document.

http://www.sec.gov/Archives/edgar/data/887225/000119312508096551/d6k.htm

blast_investor wrote: Hi bdcmm

Yes, this stock KEP looks very attractive, particularly the
low price to book ratio (< 1), and low EV/EBITDA ratio.

**bdcmm** Thu May 08, 2008 12:51 pm

Revenue has been rising steadily, but high energy price (oil, natural gas, coal) is hurting its profit. One thing KEP would have done better is to hedge the energy price. Would be a good long-term investment when energy price starts its down trend (could be a long wait though) or its stock price drops further.

**zhang242463** Thu May 08, 2008 12:53 pm

would you mind open a thread and air your opinion on RAS again? I think it is a good buy if it ever dipped again on book value worries.

bdcmm wrote: Revenue has been rising steadily, but high energy price (oil, natural gas, coal) is hurting its profit. One thing KEP would have done better is to hedge the energy price. Would be a good long-term investment when energy price starts its down trend (could be a long wait though) or its stock price drops further.

**bdcmm** Thu May 08, 2008 1:18 pm

I have a busy work/life schedule, so cannot spend much time on stock analysis or posting :)

On RAS:
The main risk is unexpected liquidity hit, such as TMA. The probability on RAS is small due to its diversity in its portfolio, and little exposure to sub-prime mortgages. The recent quarters shows its prudence managing its liquidity, and I would give its management a high score on this matter. Due to high leverage in financial companies, good and prudent management is very important. I continue to like RAS, and its cash flow is still attractive at its current stock price, however stock price of RAS will continue to fluctruate due to overall bad shape of US financial industry, possibly within a couple of years.

I recently swap my investment in RAS into one of Blast's holding due to its higher margin of safety and my shallow wallet :) I may reinvest into RAS if the stock price goes lower again. I have faith in RAS management, but I have more faith in blast :)