Doosan Enerbility expects additional SMR orders this year, expands nuclear power footprint into North America and Saudi Arabia

[Financial News]  Analysts expect Doosan Enerbility to benefit from the expansion of the global nuclear power market, including small modular reactors (SMRs).
Analysts say opportunities for large-scale nuclear power projects are expanding into North America, Saudi Arabia and Vietnam, while the possibility of additional orders for key SMR equipment this year is coming into focus. Earnings growth is also expected to continue, supported by the existing order backlog.
On the 16th, Hana Securities maintained its “Buy” rating on Doosan Enerbility and highlighted its medium- to long-term growth potential. It set a target price of 120,000 won, 27.3% below its previous target, reflecting an adjustment to its valuation multiple, but maintained its outlook for the company’s long-term earnings-generating capacity.
In particular, it forecast that actual orders for key SMR equipment this year could help improve investor sentiment. The firm said expectations for nuclear power, dampened recently by concerns over delays to power purchase agreements (PPAs), could recover through actual order wins.
Yoo Jae-sun, an analyst at Hana Securities, said, "If orders for key SMR equipment materialize this year, somewhat subdued expectations could pick up again."
The firm also viewed the potential expansion of overseas markets for large-scale nuclear power projects positively. As opportunities for Korean nuclear companies to participate in projects in North America grow alongside investment negotiations with the United States, new nuclear power projects in Vietnam are also being discussed as potential sources of orders over the medium to long term. The AP1000 nuclear power business could likewise expand beyond its existing presence in Europe to Saudi Arabia.
In South Korea, the scale of construction of new large-scale nuclear power plants and SMRs to be included in the 12th Basic Plan for Electricity Supply and Demand is seen as a factor that could affect future order growth.
Earnings are also expected to continue growing. Hana Securities estimated Doosan Enerbility’s consolidated revenue for the third and fourth quarters at 4.3 trillion won, up 9.8% from the same period a year earlier, and operating profit at 194.1 billion won, up 41.6%.
Although the figures are below market expectations, the firm saw room for improved profitability as revenue reflects supplies for large gas-fired power projects and nuclear equipment secured last year and this year. Higher earnings in the construction equipment segment are also expected to partially offset the cost burden of the fuel cell business.
Analyst Yoo added, "Stable growth in the Enerbility division is possible based on the existing order backlog," and "the rising order trend in key businesses, including gas turbines and steam turbines for North America, is also a positive factor." 


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