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Author: curmudgeon1 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 32  
Subject: Re: Kepco Date: 12/23/1997 10:49 AM
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>> I bought some KEP at 8 as a play on reunification <<

Seems like a good price, though North/South reunification may be a "little thing" regarding the future of this company. KEP has been growing with the Korean economy, which is about 11%/year -- sky-high for an electric utility.

The North has a pitiful, tiny economy compared to the South, so it's really not a positive factor.

What really matters is the growth rate of the total economy, plus management ability to keep the electric system running. When an electric grows more than 6%/yr, it becomes really challenging to meet demand. You can only build things so fast.

On the other hand if you got to have a problem, too-fast growth is the best kind to have!

A year ago Value Line reported the book value at $15/share. Now the currency is worth about half its former dollar value, but can you really say that a tangible asset is worth only half that? I don't think so when it's a power plant. There should be inflationary price pressure on the market value of assets in Korea. So you bought KEP at probably less than book value, in an economy that did grow at over 10%/year.

Even if Korea grows less rapidly this should be a good buy.
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