KB Securities analyzed that the possibility of the final contract related to the Czech nuclear power plant order for KEPCO E&C could be postponed to next year, making the acquisition of additional growth momentum crucial. They maintained a target stock price of 87,000 won and an investment recommendation of 'buy.' The closing price for KEPCO E&C was 62,800 won on the previous trading day.
KB Securities projected that KEPCO E&C's sales and operating profit would record 540 billion won and 48 billion won, respectively, declining 2.4% and 9.5% compared to the previous year.
As the progress rate of Units 3 and 4 of the Shinhanul nuclear power plant begins to rise significantly, sales in the nuclear power sector are expected to be sustained. However, the main reason for the contraction is attributed to the delay in securing the Czech nuclear power plant order.
Jeong Hye-jeong, a KB Securities researcher, said, "The final contract for the Czech nuclear plant, which was scheduled to be signed last May, has been temporarily suspended due to a prohibition lawsuit filed by Electricité de France (EDF) in a local court."
Furthermore, Jeong noted, "Considering the strong intent of the Czech government to introduce nuclear power, the likelihood of this order falling through is very low. However, with the general elections approaching in October this year, it seems that the signing of the final contract will be postponed until next year." It is projected that if the final contract for the Czech nuclear plant materializes in 2026, the timeline for significant sales expansion would be delayed to 2028–2029.
KB Securities pointed out that while KEPCO E&C has a solid business pipeline, it is necessary to secure additional growth momentum. Currently, KEPCO E&C's large nuclear power pipeline includes two new nuclear plants scheduled to operate in 2038–2039, as detailed in the 11th Basic Plan for Power Supply and Demand Beyond the Czech nuclear plant. Additionally, the Polish nuclear project in collaboration with Polska Grupa Energetyczna (PGE) and the Polish private energy company ZEPAK, for which a letter of intent (LOI) has been signed, has not been canceled, and possibilities regarding the Units 5 and 6 of the United Arab Emirates (UAE) nuclear power plants also remain.
Jeong said, "Expectations for the construction of large nuclear power plants based on Korean-style reactors are deemed valid," but added that "there have not yet been many visible orders for Team Korea from other countries."
He stated, "We are in a situation where additional pipeline exploration is necessary, and we should keep an eye on whether we can secure future domestic small modular reactor (SMR) development and new renewable energy design, procurement, and construction (EPC) projects."