"Doosan Fuel Cell Transforms from Domestic Player to Exporter... Anticipation for Additional Orders"[Click eStock]

Meritz: "Significant Sales Expansion Expected Next Year"

On September 3, Meritz Securities maintained its "buy" investment rating and target price of 76,000 won for Doosan Fuel Cell. This suggests there is a potential upside of 96.4% compared to the current share price of 38,700 won. The main reason cited was Doosan Fuel Cell's recent success in securing a fuel cell order for U.S. data centers, which has significantly increased its export order backlog.

Doosan Fuel Cell announced on September 2 that it had signed a contract worth 501.4 billion won to supply phosphoric acid fuel cell (PAFC) systems to HyAxiom, a subsidiary of Doosan Corporation responsible for distributing and maintaining fuel cells in the United States. The contract is estimated to be for a mid-100MW-class facility and is intended for on-site power generation at a U.S. data center. The end customer has not been disclosed, but full-scale supply is expected to begin in the second quarter of 2027.

Kyungwon Moon, analyst at Meritz Securities, stated, "It is significant as it marks the first case of supply to a data center." Adding the European solid oxide fuel cell (SOFC) stack contract signed in early August, worth 100 billion won, Doosan Fuel Cell has secured an export order backlog of approximately 600 billion won this year—surpassing its projected annual sales.

Expectations for further orders are also rising. Doosan Fuel Cell has been in discussions with multiple data center clients, and with this contract establishing a "reference template," the pace of future negotiations is expected to accelerate. Moon commented, "Some uncertainties remain, but considering the urgent need for investment in artificial intelligence (AI) data centers, the likelihood of additional orders within the year is high."

Regarding valuation, there is considerable room for multiple expansion. As revenue recognition for both the European SOFC stack export (August 5) and the U.S. PAFC export contract (September 2) is largely expected in 2027, a significant upward revision of sales forecasts is necessary. Meritz Securities projects 2027 sales at 1.1139 trillion won, representing a 118% increase year-on-year and 52% above the market consensus of 730.9 billion won.

In the case of SOFC (solid oxide fuel cells), it is not yet time to consider follow-up orders or capacity additions. However, discussions for orders targeting both the United States and Europe are ongoing, which could become further catalysts for performance improvement, Moon added.

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