Doosan Fuel Cell saw its shares soar more than 25% during trading, reaching an all-time high, following the announcement of a 529 billion won ($429 million) supply contract for fuel cell systems. The surge in stock price is attributed to growing expectations for increased power demand from artificial intelligence (AI) data centers, coupled with the re-emergence of previously postponed large-scale orders, which has boosted investor sentiment.
According to the Korea Exchange, at 9:46 a.m. on May 22, Doosan Fuel Cell's shares rose by 29,000 won (25.03%) to 104,400 won, marking a new record high.
The strong performance in the stock market appears to reflect the impact of the recently disclosed 529 billion won supply contract. According to the Financial Supervisory Service's electronic disclosure system, Doosan Fuel Cell confirmed it has signed a supply contract for fuel cell systems with Samchully ES. The contract amount represents approximately 20.28% of its recent revenue of 260.9 billion won.
This contract involves supplying approximately 17 megawatts (MW) of fuel cell systems to domestic fuel cell power plants, with the contract period extending until June 8, 2026.
Previously, when the contract was first announced in November 2024, the amount was not disclosed due to business confidentiality. The release of this information has now clarified the scale of the order.
Market analysts believe that this announcement has contributed to the rising stock price, coinciding with increasing optimism regarding fuel cells for data centers. Doosan Fuel Cell has previously supplied products for a 39.6 MW fuel cell project in Incheon, in which Samchully ES participated.
Analysts are also focusing on the potential for expansion in the U.S. market. Jeong Yeon-seung, a researcher at NH Investment & Securities, noted in a report that discussions are underway for orders of phosphoric acid fuel cells (PAFC) through Hy-Axiom, Doosan's U.S. fuel cell subsidiary. Expectations are building that production capacity could expand to around 300 MW annually.
The increasing power demand from AI data centers is seen as a significant factor driving growth in the fuel cell market, as hydrogen fuel cells are gaining attention as an alternative power source due to the need for stable power supply in data centers.
However, concerns about valuation pressures and intensified competition are considered variables. Jeong raised the target price from 36,000 won to 80,000 won but maintained a 'hold' investment rating.
He stated, "Even with optimistic assumptions, the current stock price already reflects a valuation on par with the average of global fuel cell companies. For further increases, substantial and continuous orders that exceed market expectations are necessary." He added that not only solid oxide fuel cells (SOFC) but also competing technologies such as medium-speed engines for ships are entering the data center power generation market, emphasizing the importance of securing meaningful market share and track record in the U.S.
* This article has been translated by AI.
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