Hana Securities projected on October 16 that Doosan Enerbility's third-quarter earnings will fall short of market expectations, lowering its target price from 165,000 won to 120,000 won, a decrease of 27.3%. However, the firm maintained its 'buy' rating, considering the potential for additional orders of small modular reactors (SMRs) within the year.
Research analyst Yoo Jae-sun stated, "While we maintain our estimates for after-tax operating profit (NOPLAT) based on maximum production capacity by 2030, we have reduced the multiple applied in our valuation from 50 times to 35 times."
Hana Securities anticipates that Doosan Enerbility will report third-quarter revenues of 4.26 trillion won, a 9.8% increase from the same period last year, and an operating profit of 194.1 billion won, up 41.6%. Although the operating profit is expected to fall below market expectations, the overall trend of performance improvement is expected to continue.
By business segment, the profitability of the Enerbility division is expected to improve due to revenues from large gas power projects and nuclear equipment orders secured last year and this year. The construction machinery segment is also expected to see profit growth compared to the previous year, but the fuel cell division is likely to experience a decline in profits due to rising costs.
Key factors for a potential rebound in stock prices include the possibility of expanding domestic and international nuclear power contracts. In particular, if additional orders for key SMR equipment materialize within the year, it could restore market expectations that have been dampened by concerns over delays in power purchase agreements (PPAs).
Yoo noted, "The trend of increasing orders for major projects, including gas turbines and steam turbines for North America, continues. If key SMR equipment orders are realized this year, the re-expansion of subdued expectations is likely."
He also highlighted the potential for expanding nuclear power projects in North America due to investment negotiations and the possibility of securing nuclear contracts in Vietnam. Opportunities related to the AP1000 nuclear power project may also expand from Europe to Saudi Arabia.
Yoo emphasized, "It is crucial to see how many new large nuclear power plants and SMR units will be reflected in the 12th Basic Plan for Power Supply and Demand, which will be released following the public discussion on nuclear power this year."
* This article has been translated by AI.
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