SMRs in the Spotlight for U.S.-Bound Investments, Beneficiary Stocks [Click eJongmok]

Meritz: "Attention Should Be Paid to Doosan Enerbility and Others"

Although stocks related to Small Modular Reactors (SMR) have been underperforming, there is an opinion that these stocks could benefit if South Korea's investments in the United States materialize.

Moon Kyungwon, a researcher at Meritz Securities, stated, "There is a high likelihood that pressure to invest in the United States will increase before the U.S. midterm elections in November." He added, "If SMRs are selected as a destination for U.S.-bound investments, various SMR pipelines are expected to accelerate, so it is worth paying attention to potential beneficiaries such as Doosan Enerbility."

Moon emphasized that although the returns of leading SMR stocks have been sluggish this year, their intrinsic value remains unchanged. He explained, "Since SMRs are not yet in full commercial operation, their investment priority is inevitably behind that of artificial intelligence (AI) power systems. However, the essential advantages of SMRs remain intact. Only SMRs can provide stable, environmentally friendly, and flexible power supply regardless of geographical conditions."

He predicted that SMR-related companies will face practical challenges such as scaling up as they actually begin construction. From last year to this year, major companies including GE Hitachi and TerraPower have started construction, and many technological and regulatory issues have been resolved. However, Moon pointed out that scaling up to the gigawatt (GW) level, as well as issues related to engineering, procurement, and construction (EPC) for initial units and financial risk, are still major obstacles. He added, "Recently, there is a scenario in which South Korea and Japan are taking on these risks. Japan has already decided to invest in or is considering investments in companies such as GE Hitachi and NuScale. Attention should also be paid to the possibility that SMRs could be selected as the first or second project for South Korea's U.S.-bound investments."

This content was produced with the assistance of AI translation services.