[Click e-Stock] "Doosan Fuel Cell Likely to Turn Profitable Next Year... Investment Rating and Target Price Raised"

On September 7, NH Investment & Securities raised its target price for Doosan Fuel Cell from the previous 34,000 won to 58,000 won, and upgraded its investment rating from 'Neutral' to 'Buy,' citing expectations that the company could turn profitable next year.

Jeong Yeonseung, an analyst at NH Investment & Securities, explained, "The uncertainty regarding mid- to long-term growth has eased due to new fuel cell orders for U.S. data centers," adding, "We are raising both our investment rating and target price in consideration of greater operating rates and improved profitability."

Earlier, on September 2, Doosan Fuel Cell announced it had signed a contract with U.S.-based affiliate HyAxiom to supply phosphoric acid fuel cells (PAFCs) worth 501.4 billion won. The products will be delivered sequentially to HyAxiom from the second half of this year through the first half of 2028, with HyAxiom supplying them to artificial intelligence (AI) data centers in the United States.

Jeong assessed, "It is presumed that a higher price per unit was applied than for recent domestic orders," adding, "Given this, the estimated order size is approximately 140 megawatts (MW). Considering the absolute volume, it is highly likely the fuel cells will serve as the main power source—rather than just backup power—for the data centers."

Additional orders are also anticipated. Jeong commented, "This order demonstrates that PAFCs, despite having lower power generation efficiency than solid oxide fuel cells (SOFCs), can compete in the U.S. data center electricity market," adding, "With growing local demand for on-site generation, the likelihood of additional PAFC orders in the United States is high." He continued, "Based on existing orders, Doosan Fuel Cell has secured annual production of over 250MW of fuel cells, and its PAFC production capacity is expected to expand to 350MW per year, which means the company will have sufficient capacity to accommodate further orders."

While there remain financial burdens this year, a return to profitability is projected for next year. Jeong explained, "Annual operating losses and increased working capital stem from costs of stack replacement for already supplied fuel cells and low utilization rates." He added, "However, from 2027, as production volume increases substantially, the burden of fixed costs will ease and the company is expected to achieve an operating profit."

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