Meritz Securities said on the 7th that for Doosan Enerbility, higher selling prices on gas turbine orders this year and whether it wins Small Modular Reactor (SMR) orders will be the key things to watch in the first half. The firm kept its "Buy (BUY)" rating and raised its target price to 122,000 won from 111,500 won. Doosan Enerbility's closing price in the previous session was 95,700 won.
Moon Kyung-won, an analyst at Meritz Securities, said, "After booking orders in March for seven gas turbines for U.S. artificial intelligence (AI) data centers and three for Korea South-East Power, additional export contracts are expected within the year," and noted, "The company's gas turbine production capacity (CAPA) is slated to be expanded from the current eight units to 12 by 2028, but even that looks tight."
He added, "Considering the situation of global competitor GE Vernova (Vernova), we expect the tight supply-demand conditions to lead to higher selling prices for orders."
For SMRs, it analyzed that orders for TerraPower and NuScale Power in the United States are imminent. It explained that if visible order results emerge in the SMR market, which has long been marked by uncertainty, that would be significant.
It forecast Doosan Enerbility's first-quarter operating profit on a consolidation basis this year at 143.1 billion won. That would be up 0.4% from a year earlier but below the market consensus of 210.9 billion won.
It projected the Enerbility division's operating profit at 64.1 billion won, swinging to a profit from a year earlier, with an operating margin of 3.8% despite the off-season. However, it expected consolidated operating profit to be weak as earnings softness persists at subsidiaries including Doosan Bobcat and Doosan Fuel Cell.
Regarding the Czech Dukovany engineering, procurement and construction (EPC) contract being delayed versus earlier expectations, it analyzed that this would not affect achieving more than the annual order guidance of 13.3 trillion won.
Moon said, "Beyond SMR orders, attention should be paid to U.S.-bound investment expected to be announced in April–May," adding, "Natural gas projects such as Louisiana liquefied natural gas (LNG) appear most likely to be the first, but if nuclear power is included, share prices across the nuclear power value chain could rise."