No US Nuclear Power Plant Orders... Opportunity for Korean Construction Firms

One of the main reasons why domestic nuclear power-related stocks have been stagnant since last year is the delay in U.S. nuclear power plant orders. There was an expectation that the first SMR-related order would come by the end of last year or early this year, but no orders have been placed so far. Lee Young-hoon, Sales Director, explained the current situation: "All those nuclear power stocks are currently stagnant. If you look at it, last year there was an expectation that the first SMR-related order would come by the end of the year or next year, but it didn't happen. It just gives the feeling that things are progressing very slowly in a stagnant state. The U.S. said it would build 300 nuclear power plants, including SMRs, by 2050, but not a single order has been placed." In addition, after a supply-demand imbalance in June, the rebound of nuclear power stocks has been limited, and the possibility of a change in the Democratic Party's stance on nuclear power is being raised depending on the results of the U.S. midterm elections.

Despite anticipated performance improvement compared to last year, Doosan Enerbility still records a price-to-earnings ratio (PER) of over 100, indicating an overvalued state. This suggests that the market has significant expectations for Doosan Enerbility. Lee Young-hoon, Sales Director, stated, "The performance picture is much better than last year. But even now, the PER is over 100. That means there's an expectation. But the problem is, it needs to materialize into a concrete picture for the supply and demand to stabilize and for it to start moving." He explained that the stock price would only move when these expectations lead to actual business concretization, which would then improve supply and demand. In other words, the current high valuation reflects expectations for future growth potential, and the actual progress of business will be key to the stock's performance.

The U.S. has extremely limited experience in nuclear power plant construction since the Three Mile Island accident in 1978. Lee Young-hoon, Sales Director, stated, "Because they have very limited experience in actually building them, the U.S. has only built two nuclear power plants since the Three Mile Island accident. So, after 1978, only two have been built, meaning they lack experience now. Operating experience is also declining, and on top of that, the U.S. needs to pursue plant-related business." Indeed, only two nuclear power plants have been constructed in the U.S. since 1978, resulting in a lack of operating and construction experience. This situation in the U.S. is actually acting as an opportunity for Korean construction firms. Recently, inquiries regarding plant-related business from within the U.S. to Korean construction firms have been increasing, demonstrating that Korea's accumulated know-how in nuclear power and plant construction can serve as a competitive advantage.

Domestic robot-related companies are still in their early stages, lacking sales performance, yet their valuations are high, leading to controversy. While overseas companies like Unitree have already started generating revenue, domestic companies have not yet reached this stage. Lee Young-hoon, Sales Director, pointed out, "Korea is just starting. So there are no sales at all. Unitree as a company has already started generating sales. So, if we talk about physical AI in Korea, it's actually about bringing up Hyundai Motor Group to discuss it. Strictly speaking, no company has claimed to be doing physical AI business and shown this level of performance." In particular, while large corporate groups like Hyundai Motor, Samsung, and LG are pursuing robot businesses, there is a lack of specific performance shown so far. This suggests that investment in domestic robot stocks may be excessively influenced by expectations for future growth rather than actual performance.

The domestic robot industry is seeking growth pathways as the value chain concretizes around large corporations such as Hyundai Motor, LG, and Samsung. Beyond acquiring Boston Dynamics, Hyundai Motor Group is pursuing humanoid-related businesses through its own robotics lab. Lee Young-hoon, Sales Director, stated, "Boston Dynamics is an American company, but Hyundai Motor Group also has its own robotics lab, where they are probably independently developing humanoid-related businesses. And if you look at recent news, they asked component companies to propose prices for parts so they could build a humanoid value chain." He emphasized that Hyundai Motor is actively building the value chain by, for example, requesting component prices from parts manufacturers for humanoid-related components. Furthermore, LG Electronics announced plans to produce actuators in-house, pursuing the internalization of core components, and affiliates such as Samsung Electro-Mechanics and LG Innotek are also strengthening cooperation in robot component fields, enhancing the overall completeness of the robot value chain. These investments by large corporations are expected to drive the rapid growth of the domestic robot industry.