Doosan Enerbility, Doosan Fuel Cell Expected to Grow

Eugene Technology's recent announcement of a 90 billion won expansion investment is seen as a signal of this trend. Lee Hwa-jin, Deputy Department Head, stated, "Starting in October, especially the front-end equipment, from the Page 2 factory in P1 to P5, will begin full operation around May in the first half of next year."

OpenAI indicated an expansion of AI infrastructure by stating that an additional 400,000 GPUs would be needed in the future. This is likely to lead to increased CAPEX investment by cloud providers, thereby increasing memory demand. Lee Hwa-jin, Deputy Department Head, explained, "OpenAI stated that an additional 400,000 GPUs would be needed after its launch. As cloud providers are highly likely to increase CAPEX investment more quickly, memory demand will grow." Starting next year, growth is expected to be volume (Q)-driven, surpassing memory price increases.

ALD equipment is critical for advanced semiconductor processes, and C-SNT's expansion investment is expected to benefit related equipment companies. Lee Hwa-jin, Deputy Department Head, mentioned, "As C-SNT is conducting a 14 trillion won IPO to raise funds, demand for ALD deposition equipment related to expansion is highly likely to emerge in earnest." Performance improvements are also expected for major follow-up equipment companies such as Wonik IPS, PSK, and Tes.

Lee Hwa-jin, Deputy Department Head, advised, "Since there are so many semiconductor SME ETFs from Tiger or other KODEX funds, it is not bad to choose from them, as I doubt if it's necessary to buy all individual stocks." There are many semiconductor SME ETFs, such as Tiger and KODEX, giving investors a wide range of choices.

As test equipment shipments increase from September, related companies are expected to see significant performance improvements. Lee Hwa-jin, Deputy Department Head, stated, "Starting this September, shipments for test equipment, in particular, are increasing. As HBM mass production officially begins, test equipment will see a significant rise in performance, leading to a very positive trend." Major post-processing test equipment manufacturers such as Techwing, Hanmi Semiconductor, and Hana Micron are expected to benefit.

The overall shipbuilding industry is showing signs of emerging from its slump, creating a positive atmosphere. The top three Korean shipbuilders have secured an order backlog of approximately 200 trillion won, ensuring 3.5 to 4 years' worth of work. Lee Jeong-ho, CEO, stated, "I believe that shipbuilding stocks have now somewhat broken away from their bottom. The three shipbuilders have secured orders worth almost 200 trillion won, which can be seen as securing 3.5 to 4 years' worth of work."

Lee Jeong-ho, CEO, explained, "China has reportedly secured five years' worth of work. Conversely, it seems Korea is being selective, with continuous orders for high-value-added products in shipbuilding." This demonstrates that the Korean shipbuilding industry is pursuing a strategy focused on profitability.

Recently, Hanwha Ocean has expanded its order momentum by securing contracts for container ships and a Thai frigate. By expanding its business from merchant ships to special vessels, its order backlog continues to grow across the board. Lee Jeong-ho, CEO, stated, "I believe the recent order momentum has come from Hanwha Ocean. There was a significant order for container ships, and today, there was news regarding a Thai frigate, so the order backlog is continuously accumulating across the board."

The shipbuilding industry's demand is expanding beyond North America to global markets like Southeast Asia, and there is a growing possibility of increasing order momentum for warships. Lee Jeong-ho, CEO, emphasized, "Now, it's not just a market looking at the US and North America, but one where expansion to Southeast Asia and globally is continuously unfolding, so overall, the order momentum for warships is likely to increase. The most important thing is securing margins, as much as the growing order backlog." Securing margins is a key concern, and Korea's order opportunities are expected to expand due to China's saturated workload.

Lee Jeong-ho, CEO, said, "I believe shipbuilding equipment and shipbuilding stocks have somewhat bottomed out, so if significant additional orders come in, there's a high possibility of reaching a peak." While expectations for US investment in the first half of the year acted as an adjustment factor, it is not a long-term negative factor, and sequential investments are expected to proceed.

An agreement was reached for the order of a total of 8 nuclear power plants, including 6 AP1000 units and 2 APR1400 units, related to Texas NCR gas power generation. Lee Hwa-jin, Deputy Department Head, stated, "It seems an agreement has been reached for a total of 8 units, 6 AP1000s and 2 APR1400s." The announcement was initially scheduled for September 18 but may be delayed as negotiations extend due to issues surrounding Westinghouse's equity investment and royalty adjustments. Given past royalty problems, there appears to be a move to resolve this issue through the current business rights adjustment. Further discussions are expected around the time of Westinghouse's IPO early next year.

Nuclear power momentum is likely to continue, but short-term volatility could increase from September 18. Lee Hwa-jin, Deputy Department Head, projected, "Momentum for nuclear power is likely to continue, but volatility may increase from the 18th." Expectations for fourth-quarter contracts remain, including the Westinghouse and Holtec IPOs in December and Hyundai E&C's Fermi nuclear power plant contract. Next year, bidding issues are pending in Poland, Romania, and Saudi Arabia. Deputy Department Head Lee advised against rushing to buy but to target after a correction post-18th, when a new rally emerges from October.

Gas turbine supply contracts are currently progressing rapidly, with a target of supplying 110 units by 2030.

Lee Hwa-jin, Deputy Department Head, stated, "For AP1000, Westinghouse has Doosan Enerbility as the sole supplier for reactor pressure vessels, so all six units will go to Doosan." With the supply of a total of 6 AP1000 reactor pressure vessels, performance reflection in the core supply system is expected.

Doosan Fuel Cell successfully transformed its business structure by securing a significant 50 billion won order. Lee Jeong-ho, CEO, emphasized, "If a company in an industry previously unrelated to AI now becomes directly linked to AI, I believe it has intrinsic meaning for the company itself, and it is currently entering the profitable data center market." As a business previously unrelated to AI directly links to AI-related businesses such as data centers, a re-evaluation of corporate value is expected. Securing continuous order momentum is seen as a key growth driver.

Doosan Fuel Cell, which plunged from 100,000 won in May to 20,000 won in July, is currently attempting a rebound around 50,000 won. Lee Jeong-ho, CEO, set the target price and stop-loss price, stating, "I believe it will rise one more step to 75,000 won due to a technical rebound plus the current positive news. I will set the stop-loss at 40,000 won." This analysis suggests that with the recent positive news reflected, there is potential for a technical rebound to 75,000 won. The stop-loss price was set at 40,000 won.

While concerns about the yen carry trade are being raised ahead of the FOMC, market downside pressure is expected to be limited. Lee Hwa-jin, Deputy Department Head, stated, "If the market collapses, the government will ultimately intervene. Just as they implemented economic stimulus measures during the 2000s COVID era, they are already steadily preparing for this market, so I believe the recent rises in Brent crude and bond yields are unlikely to be a cause for significant concern." As the government is preparing policy responses such as economic stimulus packages in the event of a market collapse, concerns regarding recent increases in oil prices and bond yields are not expected to be significant.

If the Russia-Ukraine conflict leads to discussions of an end to the war, it could positively impact oil price stability, leading to stock price increases. Lee Jeong-ho, CEO, said, "If oil prices, which have continuously risen, fall, there's a high possibility of a significant surge in stock prices. Even if the Russia-Ukraine situation simply ends, oil prices might stabilize a bit more." Market uncertainty is expected to dissipate after confirming key economic indicators like CPI, leading to market stabilization.