Brokerages are successively cutting their target prices for Doosan Enerbility, reflecting recent share-price corrections among global nuclear power and power-equipment companies that have lowered valuation expectations.
According to the financial investment industry on the 28th, Eugene Investment & Securities lowered its target price for Doosan Enerbility to 110,000 won from 150,000 won, a 26.7% cut, on the 28th. The move reflected the share-price corrections among global nuclear and power-equipment companies. The firm maintained its "buy" rating.
"We lowered the target price to reflect the recent valuation adjustment among global peers," said Hwang Sung-hyun, an analyst at Eugene Investment & Securities. "But given Doosan Enerbility's solid earnings and order momentum, U.S. investment in the second half, along with expanded supply of SMR and nuclear equipment, will drive the share price higher."
In particular, he said SMR projects including NuScale, X-Energy and TerraPower are progressing smoothly. He projected that the realization of the first U.S. investment project in August-September, an expansion of AP1000 supply items, and a nuclear order in Vietnam would serve as key momentum in the second half.
Meritz Securities also lowered its target price to 131,000 won from 145,000 won, a cut of about 10%. "Second-half momentum remains ample, including additional orders for U.S. AP1000 nuclear equipment and gas turbines, as well as the NuScale SMR project," said Moon Kyung-won, an analyst at Meritz Securities. "We lowered the target price to reflect an adjustment in the long-term margin rate, but we actually raised our order forecast for this year."
Both brokerages assessed the second-quarter results positively. Doosan Enerbility posted operating profit of 314.3 billion won on a consolidated basis in the second quarter, exceeding market expectations. Cumulative orders in the first half reached 7.1 trillion won, a sharp increase from a year earlier, while the order backlog also hit a record high of 26.4 trillion won.
