NH Investment & Securities on the 21st said all three areas—large nuclear power plants, Small Modular Reactor (SMR) projects, and gas turbines—are poised for new orders for Doosan Enerbility. It kept its "Buy" rating and raised its target price to 145,000 won from 140,000 won. Doosan Enerbility's previous trading day closing price was 112,100 won.
Lee Min-jae, an analyst at NH Investment & Securities, said, "With the U.S. Trump administration expected to pressure allies to invest in the United States ahead of the midterm elections, the Korean government is also preparing to expand investment in large nuclear plants and SMRs," adding, "Orders for key nuclear components are expected."
For gas turbine orders, it assessed that additional orders are possible from a wide range of U.S. customers beyond big tech. Doosan Enerbility is also developing small and mid-size gas turbines and plans to use them to address the mid- to long-term data center market.
As reasons for raising the target price, it cited reflecting capacity expansions and orders planned through 2030. For large nuclear plants, 10 units by Team Korea and 20 units by Westinghouse (10 in the United States, 10 in Europe) are anticipated, and for SMRs, 10 gigawatts (GW) by NuScale Power and 10 GW by X-energy are expected. The target price was calculated assuming a weighted average cost of capital (WACC) of 5.7% and a perpetual growth rate of 2.6%.
The analyst said, "That is because we view the long-term growth potential of nuclear power as the strongest within the power infrastructure industry, at a level higher than power equipment and cable sectors."
It is also positive that interest in the nuclear market is rising worldwide.
The analyst said, "Despite heightened interest in nuclear power due to the U.S.-Iran war, share price trends in the U.S. nuclear market remain weak because of project delays and higher interest rates," adding, "From the point when Korean and Japanese investment in the United States kicks into high gear, project timelines are expected to accelerate."
North American utility companies are showing an active stance toward adopting SMRs. That is because the construction scale is smaller and the timeline shorter than for large nuclear plants, reducing risk. The Korean and Japanese governments are also showing strong interest in SMR investment, which is expected to work positively for SMR market expansion alongside big tech.
The analyst added, "In Europe, Italy and Belgium, which declared nuclear phaseouts, are planning to reintroduce nuclear power," noting, "In Germany as well, statements continue to be made on the need to scrap the nuclear phaseout policy."