[Edaily Reporter Shin Ha-yeon ] As large-scale investments in the U.S. energy market take shape, domestic nuclear power and power generation stocks have surged over the past week. This comes as a gas-fired power plant in Texas is being strongly considered as the first project in a $350 billion (approximately 469 trillion won) investment in the U.S., and discussions have begun regarding the construction of up to eight large-scale nuclear power plants in the U.S. However, even though these companies are grouped under the same “U.S. energy investment” theme, the actual scale of benefits is expected to vary significantly depending on the project stage, reactor type, and the specific roles each company will play—such as equipment supply, design, and construction.

According to MP Doctor on the 12th, based on closing prices on the 11th compared to those on the 4th, KEPCO Engineering & Construction(052690)surged 41.3% from 107,600 won to 152,000 won. Woori Technology, Incorporation(032820)also jumped 31.8% during the same period, from 10,630 won to 14,010 won. DOOSAN ENERBILITY(034020)rose 14.6% from 79,200 won to 90,800 won, and BHI Co., LTD.(083650)rose 14.0% from 60,000 won to 68,400 won. Notably, on the 8th, buying momentum spread to small- and mid-cap nuclear power stocks, with Orbitech Co., Ltd.(046120)and SEOJEON ELECTRIC MACHINERY Co.,Ltd.(189860)hitting their daily price limits.

The rally in nuclear power stocks was fueled by the emerging details of a major investment project in the U.S. South Korea and the U.S. are actively considering a plan to construct a 6.3-gigawatt (GW) gas-fired power plant in Encinitas, Texas, as the first project under a $350 billion investment initiative in the U.S. The plan involves first building a 1.4-GW gas turbine power plant to assess demand and economic viability, followed by the phased expansion of a 4.9-GW combined-cycle power plant. In addition, discussions are underway for a follow-up project to build up to eight large nuclear power plants in the U.S.

Expectations grew even stronger toward the end of the week. The Wall Street Journal (WSJ) reported on the 10th that South Korea and the U.S. are in the final stages of agreeing on a plan to invest over $100 billion in the energy sector, including up to eight nuclear power plants and natural gas projects. The possibility of an announcement as early as next week was also mentioned. The Ministry of Trade, Industry and Energy plans to report the details of the first U.S. investment project to the National Assembly on the 17th.

However, analysts in the securities industry caution that a distinction must be made between the broad-based rise in nuclear power-related stocks and the actual benefits that will be reflected in corporate earnings. Moon Kyung-won, an analyst at Meritz Securities, pointed out, “Obstacles remain before an actual contract is signed, including the race for reactor design dominance (AP1000 vs. APR1400), the risk-sharing structure, and a review of commercial viability.” Since the project has not yet reached the final contract stage, it is important to confirm the investment structure and the extent of domestic companies’ participation.

First, in the gas power generation sector—often cited as the first major investment in the U.S.—the beneficiary companies are expected to vary depending on the project’s progress. Han Seung-hoon, an analyst at Shinhan Investment Securities, predicted that if the 1.4 GW Phase 1 project of the NCT Project materializes, it would open direct order opportunities for DOOSAN ENERBILITY, which manufactures 380-megawatt (MW) gas turbines. Analysts suggest that, given the long manufacturing lead time for gas turbines, orders for them are likely to be placed earlier than for other equipment. Assuming 12 to 14 gas turbines are ordered for Phases 1 and 2, at approximately 300 billion won per unit, the potential order value is estimated at 3.6 trillion to 4.2 trillion won.

Once the subsequent 4.9 GW combined-cycle power plant expansion gets underway in earnest, the focus of the benefits may shift to BHI Co., LTD., which manufactures heat recovery steam generators (HRSGs). Analyst Han Seung-hoon explained, “The concretization of future combined-cycle power plant expansion plans and the selection of an HRSG vendor are expected to serve as key drivers for the stock price.” Assuming 8 to 10 HRS Co., LTD. units at approximately 50 billion won each, the potential order volume would be in the range of 400 to 500 billion won.

Han Je-yoon, an analyst at Leading Investment Securities, also commented on BHI Co., LTD. on the 10th, stating, “Since the company has a track record of supplying HRSGs to Calpine in the U.S., it is highly likely to benefit from this investment in the U.S. as well.” Ultimately, in the gas power sector, the key factors determining the stock price will be whether orders are actually placed for the first-phase gas turbine project, the scale of subsequent combined-cycle power plant expansions, and the selection of equipment suppliers.

In the nuclear power sector, the specific reactor type adopted is even more critical. The AP1000 is a nuclear reactor developed by Westinghouse in the U.S., while the APR1400 is a large-scale nuclear reactor developed independently by South Korea. Currently, the market is discussing a plan to construct both reactor types simultaneously.

DOOSAN ENERBILITY is viewed as having relatively high visibility for benefiting from this trend, as it is capable of supplying core nuclear power plant equipment for both reactor types. KIWOOM Securities estimated that for the AP1000, DOOSAN ENERBILITY could secure orders worth over 400 to 500 billion won per reactor by supplying components such as the reactor pressure vessel (RPV) and steam generators (SG). For the APR1400, the scope of supply expands to include main equipment, turbines, and generators, so the estimated order value per unit could rise to 2.5 trillion to 3 trillion won.

In contrast, KEPCO Engineering & Construction, which is responsible for nuclear power plant design, is even more sensitive to the proportion of APR1400 projects. If business proceeds primarily with the AP1000—where Westinghouse leads the design—KEPCO Engineering & Construction’s scope of participation could be limited; however, with the APR1400, the company is responsible for general and system design, and analysis suggests it could have the opportunity to secure orders worth 600 billion to 800 billion won per unit. Cho Jae-won, an analyst at KIWOOM Securities, explained, “While KEPCO Engineering & Construction may have higher upside potential—given that expectations for its entry into the U.S. market are not reflected in its earnings estimates—it remains uncertain whether the company will benefit from AP1000 construction.”

The securities industry is also placing emphasis on the possibility that participation opportunities across the entire domestic nuclear power supply chain will expand, although there are differences depending on the reactor type. Jeong Hye-jeong, an analyst at KB Securities, stated, “Since South Korea is making direct investments in the U.S. power infrastructure industry, the supply chains for related projects will center on the participation of Korean companies,” adding, “Participation by the domestic supply chain is also expected in future Alaska LNG development and large-scale nuclear power projects, and if the construction of large-scale nuclear power plants centered on the AP1000 or APR14000 is included in the second project, nuclear-related stocks—such as DOOSAN ENERBILITY, which can secure orders for equipment for both U.S.-style and Korean-style nuclear power plants, and KEPCO Engineering & Construction, which has strengths in the nuclear power plant design sector—are expected to benefit.”