[비즈한국] As the Czech Dukovany nuclear power plant export contract was delayed by a local court's decision, nuclear energy stocks in the domestic stock market, including Doosan Enerbility034020, KEPCO Plant Service & Engineering130660, and KEPCO E&C052690, all plummeted simultaneously. On the 6th (local time), the Brno Regional Court in the Czech Republic issued an injunction prohibiting the signing of a final contract between Korea Hydro & Nuclear Power (KHNP) and a subsidiary of the Czech utility company CEZ.
Previously, in July of last year, KHNP was selected as the preferred bidder for the construction project of two nuclear power units at the Dukovany plant. Subsequently, its competitor, EDF, filed an objection with the Czech Office for the Protection of Competition (UOHS), citing procedural issues, but the UOHS ultimately dismissed EDF's objection on the 24th of last month. However, unhappy with the decision, EDF filed an administrative lawsuit with the Brno Regional Court on the 2nd, requesting the cancellation of the UOHS's ruling.
Heo Min-ho, an analyst at Daishin Securities, stated, "The court's decision takes into account that if the contract were signed while the main lawsuit is being heard, the effectiveness of any potential remedy would be lost. Following the approval of the injunction, it is difficult to sign the final contract until a verdict on the main suit is reached."
Consequently, nuclear-related stocks such as Doosan Enerbility, KEPCO Plant Service & Engineering, and KEPCO E&C all showed a downward trend in the domestic stock market on the 7th. As nuclear stocks have fluctuated repeatedly with news related to the Czech nuclear construction project, this local court ruling has negatively impacted investor sentiment.
However, many are of the opinion that the mid-to-long-term outlook remains positive. This Czech nuclear export is a major deal, the first of its kind in 16 years since the Barakah nuclear plant in the United Arab Emirates (UAE) in 2009, with a project value reaching approximately 26 trillion won. According to Yuanta Securities, considering that the total revenue of the domestic nuclear supply industry (excluding power generation companies and research/public institutions) was only 5 trillion won as of 2023, the direct and indirect economic effects of this order are estimated to be over 50 trillion won.
Furthermore, the fact that order momentum with direct benefits for domestic companies, such as nuclear projects in Bulgaria and Sweden, is imminent in the second half of this year is another factor boosting expectations for nuclear stocks. In particular, expectations that the global nuclear market will grow rapidly have intensified this year. As competition for artificial intelligence (AI) intensifies, global policy trends are shifting from anti-nuclear to pro-nuclear, and there is a high possibility that exports like the Czech project will not be one-off events. Along with this, next-generation nuclear technologies such as Small Modular Reactors (SMRs) are emerging as a new growth engine alongside the large-scale nuclear power market.
Moreover, there are predictions that this will also provide opportunities for the construction sector. Hyundai E&C000720 announced a mid-to-long-term management strategy last March focusing on energy businesses such as large-scale nuclear power and SMRs, and Samsung C&T028260, DL E&C, and Daewoo E&C are also preparing for growth in the nuclear market in their own ways. Jang Yoon-seok, an analyst at Yuanta Securities, said, "For the construction industry, which has been chronically undervalued compared to the KOSPI due to high earnings volatility based on construction cycles and low industry growth, business opportunities derived from the expansion of the global nuclear market will serve as a trigger for higher corporate valuations."
The political atmosphere is also changing. Nuclear-related policies are often decided politically, and policies have changed with administrations depending on public opinion. However, there is growing anticipation as even the Democratic Party of Korea, which previously adhered to an anti-nuclear policy, has turned toward an energy mix strategy rather than a complete nuclear phase-out.
In a report on the 16th of last month, Macquarie Securities predicted, "The number of nuclear reactors under construction worldwide has reached a 30-year high," adding that "Asian countries like South Korea and China could lead nuclear power generation." While there are variations in forecasts by institution, the consensus is that the scale of nuclear power generation is clearly set to expand.