On the 29th, SK Securities said that Doosan Fuel Cell is showing weak earnings, but noted it is positive that the company has a high chance of entering the U.S. data center market. It raised its target price to 42,000 won from 38,500 won and maintained a buy rating. The previous trading day's closing price of Doosan Fuel Cell was 34,750 won.
In the fourth quarter of last year, Doosan Fuel Cell's revenue is estimated at 146 billion won, down 44.2% from a year earlier, with an operating loss of 26 billion won. This falls short of the market consensus operating loss of 22 billion won.
Naminsik, an analyst at SK Securities, cited the deferral of delivery schedules for domestic fuel cell projects and higher expenses due to depreciation recognition at the Gunsan SOFC plant as reasons for the short-term earnings weakness. Because the deferred volume is not a contract cancellation, it is expected to be recognized as revenue this year.
The analyst said, "This month, the Trump U.S. administration announced an emergency power auction," and added, "Ahead of this year's midterm elections, electricity bills have risen due to data centers, increasing the burden on the cost of living."
The core of the announcement is to have generators and infrastructure needed for artificial intelligence (AI) data centers borne at big tech's expense.
The analyst emphasized, "In the U.S. generator market, on-time supply (lead time) is emerging as the most important variable, which will create an opportunity for domestic generator companies like Doosan Fuel Cell to enter the U.S. market." Through the U.S. fuel cell subsidiary, HyAxiom, Doosan Fuel Cell's PAFC fuel cells are seen as having a high chance of penetrating the data center market.
The analyst said, "Although a gap is emerging between earnings and the share price, we raised the target price because there is a high possibility of entering the U.S. data center market, which is the share price momentum (upside potential)."