Up 33% While KOSPI Gained 3%...The Stock Igniting on Anticipation of a $120 Billion Mega-Deal [This Week's Focus Stocks]

South Korea Considering Construction of Eight Large-Scale Nuclear Power Plants Worth $120 Billion

Hyundai Engineering & Construction—Korea’s Leading Nuclear Plant Builder—Gains Attention

Hyundai E&C Actively Expanding Into U.S. Nuclear Marke

Editor's Note
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As the Korean government pushes forward with the construction of large-scale nuclear power plants in the United States, Hyundai Engineering & Construction has emerged as a beneficiary stock. Hyundai Engineering & Construction is recognized for its strengths across the entire nuclear power industry—from large nuclear power plants to small modular reactors (SMRs). In the past, the company mainly focused on construction (C), but it has now transformed into a full-fledged EPC (Engineering, Procurement, and Construction) enterprise, handling engineering (E) and procurement (P) alongside construction. This transformation has led to a revaluation of its stock price.

The UAE Barakah Nuclear Power Plant constructed by Hyundai Engineering & Construction.

Korea and the U.S. Discussing Construction of Eight Large Nuclear Reactors in the U.S. Worth $120 Billion

According to Korea Exchange on September 16, Hyundai Engineering & Construction's stock rose by 32.7% last month, far outperforming the KOSPI’s 3.4% rise. Even this month, while the KOSPI has fallen by about 2.7%, Hyundai Engineering & Construction has maintained strong momentum, posting a 2.5% gain.

The surge in Hyundai Engineering & Construction's share price is fueled by expectations for its top-tier nuclear power construction technology. In particular, the company’s stock gained further traction as the likelihood increased for the Korean government to build large-scale nuclear power plants in the United States. According to industry sources, the U.S. government reportedly proposed to the Korean government that out of Korea's planned $350 billion investment in the United States, $120 billion (KRW 161 trillion) should be dedicated to building eight new nuclear reactors.

The Ministry of Trade, Industry and Energy is also said to have reported these developments in a recent closed-door policy meeting at the National Assembly. The Wall Street Journal recently reported that the Korean government was on the verge of agreeing to invest over $100 billion in the energy sector in the U.S.—including eight nuclear power plants and a natural gas project—as the first major deal following an investment pact the two countries signed last year.

Korea’s investment in American nuclear power plants presents major opportunities for domestic construction companies. Due to the explosive growth of the artificial intelligence (AI) industry in the U.S., demand for electricity for AI data centers is soaring, underscoring an urgent need for new nuclear plants. However, there are not many companies in the U.S. capable of executing such large-scale construction. In contrast, Korean construction companies have demonstrated world-class EPC capabilities through continuous domestic nuclear plant builds as well as their success with nuclear projects in the Middle East.

Market watchers are paying the most attention to Hyundai Engineering & Construction among Korean construction firms. Hyundai Engineering & Construction has proven its expertise by building 24 out of 36 large nuclear reactors constructed in Korea to date, from the Kori No.1 unit to Korean standard design reactors and new-generation light water reactors. Notably, the company’s successful completion of the Barakah Nuclear Power Plant in the United Arab Emirates in 2009 won global recognition for its EPC implementation abilities. Over the past several years, Hyundai Engineering & Construction has steadily been re-rated, not just as a general construction stock, but as a leading nuclear power play.

Park Sera, Analyst at ShinYoung Securities, commented, “With the inclusion of U.S. nuclear power plant construction in Korea’s investment projects in America, Hyundai Engineering & Construction now has a high chance of participating.” She added, “The company is uniquely positioned to benefit from all manner of construction orders—spanning power (nuclear plants, SMRs), transmission and distribution, infrastructure (civil engineering), and residential.”

Top in Korean Nuclear Construction—Rising Interest in Hyundai Engineering & Construction, Aggressive Entry into U.S. Market

With the rapid expansion of the AI industry, Hyundai Engineering & Construction is currently focusing on its U.S. nuclear operations. The company's U.S. nuclear power business is progressing along a two-track approach: partnering with Westinghouse for large reactors while collaborating with Holtec and TerraPower on SMR projects. In particular, the company’s recent cooperation with TerraPower—founded by Microsoft’s Bill Gates—drew considerable attention.

On this note, Jung Ki-sun, Chairman of HD Hyundai, met with Bill Gates, Chairman of the Board at TerraPower, in Seoul on August 14 to discuss the next-generation SMR project. Back in May, HD Hyundai, TerraPower, and Hyundai Engineering & Construction signed a tripartite memorandum of understanding (MOU) for cooperation on sodium-cooled fast reactor (SFR) technology. Hanwoo Lee, CEO of Hyundai Engineering & Construction, also attended the meeting.

Hanwoo Lee, CEO of Hyundai Construction (left), is discussing business cooperation plans after meeting with Bill Gates, Chair of the Board of TerraPower, on the 14th of last month. Hyundai Construction

Chairman Jung and CEO Lee discussed multifaceted avenues for cooperation—including manufacturing, supply chains, and construction—to accelerate commercialization of the next-generation sodium-cooled SMR. Chairman Jung stated, “By establishing a collaborative network covering technology, manufacturing, and EPC, we can expedite the commercialization of next-generation reactors. We will actively respond to growing SMR demand through our own R&D and by partnering with global companies.”

Subsequently, on August 18, Hyundai Engineering & Construction signed a framework agreement with TerraPower for the sodium-cooled nuclear project. Through this agreement, Hyundai Engineering & Construction secured preferential rights to participate as an EPC partner in up to eight additional sodium reactor units planned by TerraPower.

The 'Natrium' project being developed by TerraPower is a next-generation, fourth-generation SMR model based on a 345MW sodium-cooled fast reactor (SFR). Its main features include use of liquid sodium as a coolant for enhanced safety and integration of an energy storage system, which allows for flexible output in accordance with changing renewable energy supply.

Hyundai Engineering & Construction is also partnering with U.S. nuclear specialist Holtec. Building on its rights to construct Holtec’s proprietary SMR-300—a 300MW-class light water SMR model—the company is targeting both U.S. domestic and global contract wins.

A key project is the planned construction of two SMR-300 units at the Palisades nuclear plant site in Michigan. Both companies are aiming for commercial operation by 2030. In addition, the partnership extends beyond SMR construction to encompass nuclear plant decommissioning, spent fuel interim storage, and other segments throughout the nuclear value chain—serving as a symbolic showcase of Korea-U.S. nuclear technology and construction cooperation.

Jang Moonjun, Analyst at KB Securities, stated, “By securing EPC priority rights for TerraPower’s SMR project, Hyundai Engineering & Construction is building its pipeline across the entire spectrum of nuclear projects—large-scale units, SMRs, Gen III.5, and Gen IV reactors. We recommend Hyundai Engineering & Construction as our top nuclear pick, both as a leading company in Korea and as an emerging global player.”

The company’s earnings outlook remains positive. According to FNGuide’s analyst consensus, securities firms forecast Hyundai Engineering & Construction’s operating profit to increase 33% year-on-year to KRW 868.9 billion in 2026, and further to KRW 1.1276 trillion in 2027.

Kim Sunmi, Research Fellow at Shinhan Investment Corp., commented, “While price competition limits profitability in domestic projects, Hyundai Engineering & Construction is more likely to secure strong returns overseas since it can negotiate prices directly with major designers as a sole construction partner.” She added that the company is her top pick in the sector.

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