Last month a report issued by Eugene Securities among investors became a hot issue. The report, titled "There is no nuclear renaissance," was written by Han Byeong-hwa, Head of Team, who is in charge of the green industry sector.
In the report, Han, Head of Team, expressed a negative view of nuclear power, saying that U.S. and Chinese nuclear power capacity (CAPA) is on a downward trend and that power for U.S. artificial intelligence (AI) data centers is centered on renewable energy. In particular, he pointed out that ▲U.S. small modular reactor (SMR) agreements have increased but there are no firm contracts, ▲the increase in U.S. nuclear generation is due to utilization of existing plants, and ▲domestic nuclear power is in an oversaturated state.
His analysis upset those who had invested in nuclear stocks. In particular, investors in nuclear power who read the report were irked as nuclear stocks that surged this year happened to be undergoing corrections around the time the report was released. Over the past month (Aug. 12–Sept. 12), related stocks such as Doosan Enerbility (-12.1%) and Korea Electric Power Corporation (-5.4%) saw their share prices fall.
After the nuclear phase-out policy pursued during the Moon Jae-in administration, nuclear power and renewable energy have been perceived as opposing forces in Korea's energy industry. In this context, when an analyst who has defended the renewable energy industry issued a report with a negative nuance toward the nuclear industry, some investors criticized it as an "intentional disparagement."
The controversy surrounding Han, Head of Team's report is expanding to questions about the analyst's scope of analysis. Han, Head of Team, who belongs to the KOSDAQ venture team and is said to be in charge of the green industry, presented a negative outlook on the nuclear industry, which is not the sector he covers.
Generally, analysts build sophisticated analytical models for the industries they cover and present investment opinions based on figures. It is virtually impossible to provide the same level of quantitative analysis for other industries they do not cover as the covering analyst can.
Some in the market pointed out that if one wants to express a negative opinion, they should be assigned to that area and issue the report. A securities firm analyst commented on the controversy, saying, "Putting 'Not Rated' (no investment opinion) in a report indicates that the covering researcher cannot casually give opinions without earnings estimates and a target price."
There are also opposing views. From an investment strategy perspective, analysis that considers interindustry connections is necessary, and mention of other industries in that process is unavoidable. The argument is not to attack remarks as coming from a different sector but that negative opinions should also be heeded. In particular, because Han, Head of Team, is in charge of the green industry, it is evaluated that he can address the energy industry, which is in competition, as an extension of his analysis.
Moreover, Han, Head of Team, is known for bold reports that run counter to market trends. In 2018 he pointed out a bubble in bio stocks, and in 2023 he issued a sell rating on the rapidly rising ECOPRO BM, placing him at the center of controversy. In fact, subsequent stock movements largely aligned with his warnings.
Research is important for investment opinions, but above all, accurate analysis and evidence are paramount. Even if remarks about other industries are possible, the key is whether that analysis has objectivity and expertise. Industry sources commonly say that because reports influence investors' judgments, a responsible approach that considers their weight and impact is needed.
Some say the essence of the controversy lies less in 'who said it' than in how ready the market is to accept diverse interpretations. An investor-advisory firm chief who is a former analyst said, "While analysts should be cautious about commenting on areas they do not cover, the market is connected and investors want faster interpretations," adding, "Because investing is betting on uncertainty, instead of rejecting other opinions, it should be used as an opportunity to check position risks."