Korea Midland Power Co. Ltd.

Overview Key strengths Key risks Core subsidiary of Kepco and one of Korea's major coal-based power generation companies. Lack of transparency in government mechanism to adjust wholesale electricity prices. Good market position in electricity supply in the country, accounting for about 8% of national power generation. Rising investments for environmentally friendly power generation. Low cyclicality of demand. Elevated debt due to earlier capital expenditure needs to replace coal-based plant. We expect Komipo to remain a core subsidiary of Korea Electric Power Corp. (Kepco; AA/Stable/A-1+). This is because of the integral nature of power generation in Kepco's role of providing a stable supply of electricity in Korea. Komipo generates about 8% of the nation's total power. We equalize the rating on

...The rating on Korea Midland Power Co. Ltd. (Komipo) is equalized with that on its parent. We expect Komipo to remain a core subsidiary of Korea Electric Power Corp. (Kepco; ##/Stable/A- 1+). This is because of the integral nature of power generation in Kepco's role of providing a stable supply of electricity in Korea. Komipo generates about 8% of the nation's total power. We equalize the rating on Kepco with that on the government of South Korea (##/Stable/A-1+). This is due to the company's special public status in implementing the government's electricity policy. We expect Komipo's operating performance to improve further. Major coal-based power generation companies (gencos) in Korea, including Komipo, have improved their earnings since the second half of 2023. This is largely due to stabilized raw material costs and a higher adjustment coefficient (an additional price adjustment) for coal. The government raised the...

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