Research Update: Korea Midland Power Co. Ltd. Assigned 'AA' Rating; Outlook Stable

We view KOMIPO as a core subsidiary of KEPCO, and therefore equalize the rating on the company with that on KEPCO. KOMIPO's good market position as one of the major power-generating companies in Korea with an improving generation capacity and mix is tempered by the less transparent and predictable nature of wholesale electricity prices in Korea. In addition, we expect the company's profitability and credit metrics to remain under pressure in 2018-2019. We are assigning our 'AA' long-term issuer credit rating to KOMIPO. The stable outlook for the next 24 months reflects our expectation that KOMIPO will continue to play an integral role in KEPCO's strategy of providing a stable supply of electricity. The rating on KOMIPO primarily reflects our

...+ We view KOMIPO as a core subsidiary of KEPCO, and therefore equalize the rating on the company with that on KEPCO. + KOMIPO's good market position as one of the major power-generating companies in Korea with an improving generation capacity and mix is tempered by the less transparent and predictable nature of wholesale electricity prices in Korea. In addition, we expect the company's profitability and credit metrics to remain under pressure in 2018-2019. + We are assigning our '##' long-term issuer credit rating to KOMIPO. + The stable outlook for the next 24 months reflects our expectation that KOMIPO will continue to play an integral role in KEPCO's strategy of providing a stable supply of electricity....

Research Update