Korea Electric Power Corporation (KEP) enters its May 15 earnings with a quietly mounting short-squeeze-in-reverse narrative: short sellers have been adding exposure at pace, yet options traders have turned conspicuously bullish — a divergence that defines the week's most interesting tension.
The short book has grown sharply, and the month-long accumulation is now hard to ignore. Estimated short shares climbed 58% over the past month, reaching roughly 924,000 shares as of April 28. Translated to the free float, that amounts to about 0.15% — a modest absolute level, but the rate of change is the story. Borrow costs have nudged up 6% on the week to 0.59%, and while the lending market remains far from tight — availability well in excess of any squeeze threshold — the ORTEX short score has risen steadily from 29.8 on April 16 to 33.7 on April 28. The short score ranks in the 85th percentile versus the broader market, and the days-to-cover rank sits in the 94th percentile, reflecting how illiquid this ADR's borrow base is relative to typical trading volume. The short score direction is the signal; the absolute level is not yet extreme.
Options positioning tells the opposite story. The put/call ratio has dropped to 0.34, nearly a full standard deviation below its 20-day average of 0.51, and represents one of the most call-heavy readings of the past year — the 52-week low on PCR is 0.06, so there is room to run further bullish, but the direction of travel over the past two weeks is clear. From late March through early April, PCR was running above 0.80, reflecting heavy defensive hedging. That hedging has been systematically unwound. Traders are now positioned for upside, just as short sellers are increasing their bets against the stock.
The fundamental picture is shaped almost entirely by the government. South Korea directly or through state entities controls just over half of KEP's shares outstanding — the Korean Development Bank holds 32.9%, the Korean government 18.2%, and the National Pension Service another 7.8%. This ownership structure constrains both the free float and the policy latitude available to the company. A recent Chosunbiz piece summarised the structural bind: rising oil costs threaten KEPCO's profitability while rate hike restraint remains politically constrained, limiting KEPCO's ability to pass costs through to consumers. On the positive side, KEP signed nuclear and power infrastructure cooperation deals with Vietnam this week, expanding its footprint beyond the domestic utility model. The 2025 annual Form 20-F was filed on April 29, giving investors a full-year financial picture ahead of the May 15 earnings event. Analyst coverage is effectively absent from Western sell-side desks — the most recent formal rating changes on file are from 2016, making the consensus data entirely stale and not worth citing.
Earnings history is the sharpest lens through which to read current positioning. The February 2026 results triggered a punishing -14.8% single-day decline and a -27.6% five-day drawdown. That reaction — the most recent in the dataset — appears to have shaped both sides of the current setup: shorts are rebuilding while call buyers are betting the next print can't be as ugly. The May 15 date is close enough to matter for positioning decisions made this week.
The dividend score ranks in the 99th percentile, and EV/EBIT scores in the 84th — both point to a stock trading at a valuation that looks cheap on headline multiples, even as EPS momentum ranks near the bottom of the universe (5th percentile on 30-day, 12th on 90-day). That combination — cheap stock, poor earnings trajectory, government ownership constraints, and a catalyst on May 15 — is exactly the framework worth watching as the call/put divergence and the short rebuild play out into next month's numbers.
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