HD Hyundai Heavy Industries is showing strong performance on August 14. The company's stock is rising due to increased expectations for collaboration with TerraPower on small modular reactors (SMRs), coinciding with the visit of Bill Gates, chairman of the Gates Foundation. Additionally, a recent large order for power generation engines has improved investor sentiment.
According to the Korea Exchange, as of 9:56 a.m., HD Hyundai Heavy Industries shares were trading at 502,000 won, up 6,000 won (1.21%) from the previous trading day. The stock initially surged 4.23% to reach 517,000 won. At the same time, HD Hyundai's shares also rose by 2.40%.
The stock's strength is attributed to Gates' visit, during which he is expected to discuss SMR business collaboration with Chung Ki-sun, chairman of HD Hyundai. Gates is also the founder of TerraPower, a next-generation nuclear power company.
HD Hyundai is expanding its cooperation with TerraPower in investment and reactor manufacturing. In November 2022, HD Korea Shipbuilding & Marine Engineering invested $30 million in TerraPower, and in December, HD Hyundai Heavy Industries secured a contract to manufacture the reactor vessel for a 345 MW sodium reactor being built in Wyoming, USA.
In May, the two companies signed a basic agreement for the supply of sodium reactors. HD Hyundai Heavy Industries was selected as the preferred negotiator to manufacture and supply key equipment for the sodium reactor enclosure system (RES).
As TerraPower begins construction of its first commercial-scale sodium reactor in the U.S., expectations for additional orders are growing. The reactor is being built in Kemmerer, Wyoming, with a target for commercial operation by 2030.
The expansion of HD Hyundai Heavy Industries' power generation engine business is also seen as a positive factor for future stock performance. Recently, the company announced a $676 million (approximately 959.1 billion won) order for power generation engines. The 9.6 MW HiMSEN engine-based power generation equipment supplied by HD Hyundai Heavy Industries will be used to provide power to local data centers.
Han Young-soo, a researcher at Samsung Securities, noted, "The order size itself accounts for 25% of this year's total order target for the engine business, and this order has allowed the division to exceed its annual order goal. Given that the power equipment sector receives a higher valuation than the shipbuilding industry, the increased share in the power market could justify a premium compared to competitors."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.