---
endpoint: analytics
pattern: Capital Goods
status: done
latency_ms: 272980
conversation_id: b8d33780-c27a-4ae3-bdbf-412b955c0776
citations: 21
created: 2026-05-31 21:40:41Z
---

# What’s the bull case bear case for Doosan Enerbility?

# Doosan Enerbility (034020 KS) — Bull Case / Bear Case

**Setup**: Doosan Enerbility is Korea's monopoly nuclear-island manufacturer (large reactors, SMR pressure vessels, steam turbines) and an emerging gas-turbine OEM. The stock has been one of Asia's biggest re-rating stories — from ~₩28,950 in May 2025 [1] to **₩112,100–134,900 trading range in late April / May 2026** (52-week +359–395%) [20]. CLSA's most recent note (27 May 2025) lifted TP to **₩47,000 from ₩34,000** while *downgrading* HC O-PF → O-PF on price action [1] — and even that TP has since been left behind by the share price as the bull catalysts compounded. Newer sell-side initiations now anchor on much higher targets: **LS Securities Buy, TP ₩150,000** (34% upside, 18 May 2026) [20], Haitong Outperform TP ₩131,574 (30 Apr 2026) [21], FactSet average TP ~₩144k with a 95k–195k range [20].

---

## BULL CASE

### 1. Conventional nuclear export super-cycle — Doosan is the equipment supplier of record
- **Czech project anchor.** Team Korea (KHNP) was officially confirmed as the contractor on the **~₩26 trillion** Czech nuclear power deal — Korea's first nuclear export since the UAE Barakah project in 2009. Doosan guided to ~₩3.8tn of equipment scope from this and CLSA flagged the actual order could be higher [12]. The major-equipment portion alone is expected to approach KRW3.8tn [14].
- **Multi-country pipeline.** Beyond Czechia, CLSA still expects a series of orders from the **UAE, Saudi Arabia, the US (SMR and gas turbine)** in the coming years, with a midterm pipeline that includes Korea SMR and Westinghouse-led work in Poland or Bulgaria [1][3]. Bloomberg has reported that Korea is positioned to win **as many as 43% of the 400+ planned/proposed reactors globally** [10].
- **Order-book inflection.** CLSA models total new orders stepping from ~₩9.3tn (2024) to ~₩12.3tn (2025CL) and holding around ₩11–12tn through 2029CL, with the nuclear portion alone running at ₩4.7–6.0tn/yr through 2029 vs. ZERO from 2015–2021 [10]. Company's own 2029 guidance: new orders ₩13.5tn, backlog ₩36tn [1].

### 2. SMR optionality — "TSMC of nuclear"
- Doosan is **OEM-agnostic** and partners with multiple SMR developers (NuScale, TeraPower, Candu, Korea SMR). CLSA frames the strategic positioning as **aiming to be the "TSMC of nuclear"** — the contract manufacturer that wins regardless of which design commercializes [3].
- **Concrete order momentum**: Doosan has already received long-lead-material orders for **12 SMR modules** and expects main equipment orders plus additional long-lead material for six more modules in 2025 [3].
- **Pipeline visibility**: NuScale has Romania (6 modules) plus **three potential US projects** (some up to 12 modules each); Changwon capacity currently 12 modules with a roadmap to scale up in 10–20 module increments to ~20 units [14]. CLSA notes US SMR progress could be faster than Romania because Big Tech demand removes the financing bottleneck [13].

### 3. US gas turbines — the surprise growth leg
- Doosan now seems **actively discussing US gas-turbine business with multiple potential customers** and is more confident in landing its first US order in 2025; CLSA believes the recent rally already partially prices this in [4].
- Discussions reportedly cover **~10 turbines (~8 GW) for US datacentre developers** [13]. 2026 capacity is already fully booked and the company is collecting reservation fees that help fund expansion [14].
- **Pricing tailwind**: export pricing is more favourable than domestic; Doosan negotiates close to peers like GE Vernova (Doosan domestic pricing was reportedly ~1.5x lower than GEV — i.e., room to mark up) and export bundles include steam turbines / HRSGs, driving larger deal sizes [15].

### 4. Structural revenue mix shift toward higher-margin growth businesses
- Revenue mix (₩tn):

| Year | Nuclear/SMR | Gas/Hydrogen | Renewables | Other | Coal |
|---|---|---|---|---|---|
| 23A | 4.1 | 2.2 | 0.3 | 2.2 | 0.1 |
| 24A | 0.9 | 4.5 | 0.1 | 1.7 | 0.0 |
| 25F | 4.9 | 3.4 | 1.0 | 1.4 | 0.0 |
| 29F | 5.1 | 5.0 | 1.8 | 1.6 | 0.0 |

Coal essentially runs off; nuclear+gas grows from ~₩6.3tn (23A) to ~₩10.1tn (29F) [9]. Management targets **growth-business revenue share rising to 78% by 4Q25** vs ~54% in 1Q25 [3].

### 5. Annuity-style services bolt-on
- Nuclear services (replacement parts, maintenance, emergency repairs of existing reactors) is an **annual ₩200–400bn** stream that grows mechanically as more reactors come online globally [17].

### 6. Policy/political tailwind is no longer a one-party trade
- Post-impeachment of President Yoon, CLSA emphasised that the **opposition (DPK / Lee Jae-myung) stance on nuclear is materially less harsh than the prior Moon government** — Lee has pledged to keep nuclear a core part of energy policy, alongside renewables. This neutralises a key Korean-election left-tail risk that historically capped the multiple [3]. Trump's late-May 2025 executive order to ease nuclear regulatory approvals adds a US tailwind [10].

### 7. Recent results validate the thesis
- **Q1 2026 (reported 29 Apr 2026): revenue ₩4.261T (vs Street ₩4.152T), operating profit ₩233.51bn (vs Street ₩214.85bn — a 9% beat)** [18]. Backlog **₩24.134T, +3.8% q/q**, while quarterly orders normalized at ₩2.786T after a lumpy Q4 [19].

---

## BEAR CASE

### 1. Valuation has run hard — most of the easy money is made
- Stock rallied **+127.3% over the year ending May 2025 (+48.7% in the prior month alone)** on positive global nuclear news flow [2], and has since roughly tripled again to the ₩110k–135k range — i.e., the share price is now nearly 3x CLSA's ₩47,000 target [1][20].
- This is why CLSA explicitly **downgraded from HC O-PF to O-PF on price action** even while raising TP, and shifted the valuation base from a 2-year to a 3-year forward backlog (i.e., needed more out-year benefit to justify the multiple) [5].
- LS Securities' new ₩150,000 TP implies only ~34% upside from ₩112,100 [20]; Haitong's ₩131,574 is essentially in-line with spot, signalling the Street's TP dispersion is wide (₩95k–₩195k) and consensus is no longer cheap relative to current price [20][21].

### 2. Execution / legacy-project margin risk is real and recurring
- **1Q25 OP was ₩142bn — 45.6% below consensus** entirely because of a loss on a **Vietnam coal power project** [11]. CLSA had to **cut net profit estimates by 16.5% / 9.5%** (2025/2026) to reflect this kind of legacy drag [1].
- This is structural: the business model is **front-loaded with cash outflows** in early project phases, and net debt rose from ₩2.85tn to ₩3.57tn in 1Q25 alone — only expected to normalise to ~₩2.6tn by year-end [14].

### 3. Big-ticket order timing is binary and policy-dependent
- "Securing nuclear power projects by Team Korea will be a catalyst" — but the *converse* is also true: any slip in those orders is a de-rating event [7]. Czech timing already slipped from initial March 2025 guidance to mid-2025+ and remains subject to legal complications [3].
- **CLSA explicitly flags share-price sensitivity**: *"market expectations over the nuclear business have been increasing due to policy changes and overseas projects, so any major changes in the nuclear power plant outlook could lead to share price volatility"* [6].

### 4. Governance overhang — history of shareholder-unfriendly actions
- CLSA's stated investment risk: **"Doosan Enerbility has a history of unexpected rights issues and other restructurings, which is not ideal for minority shareholders"** [6]. The 2024 Doosan Bobcat ↔ Doosan Robotics merger saga (controversial swap, cancelled, revised, re-negotiated, finally scrapped in Dec 2024) is the most recent example, and many of these chaebol restructuring decisions are not announced in advance [6].

### 5. Gas-turbine market position is still small / competition is established
- 2024 global gas-turbine market share: **MHI 33%, GE 31%, Siemens 26%, Doosan ~10%** (per the document's market-share figure in 607957818) — Doosan starts from a small base against entrenched incumbents and needs to win first-mover US references to scale.
- The **precision-casting components supply chain is the main bottleneck** for gas-turbine capacity expansion — Doosan is reliant on global foundry partners in the US, Europe, Japan and Korea to expand; any slippage delays the gas-turbine revenue ramp [16].
- 2027–2028 US delivery timelines are tight (typical lead time 18–22 months) and Doosan is **pre-producing long-lead components at risk** before contract signature [the Q&A noted "begun pre-production" — capital tied up if orders slip].

### 6. SMR economics are unproven on a unit basis
- NuScale itself is **pre-revenue with uncertain unit economics, technology feasibility risk, and execution risk** per CLSA — Doosan's SMR thesis is partly dependent on NuScale (and TeraPower, Candu) actually getting to commercial revenue [3].
- Romania SMR financing has been a bottleneck, and the US backstop only materialises when a committed commercial customer (beyond exploratory phases) is signed [3].

### 7. Mix-shift is helpful but consolidated 1Q25 already showed the strain
- 1Q25 consolidated revenue fell 8.5% YoY to ₩3.7tn; consolidated OP was down >₩200bn YoY due to **Doosan Bobcat (subsidiary) earnings contraction AND product-mix transition at Enerbility itself** [3] — i.e., growth-business ramp doesn't fully offset legacy run-off in real time, and Bobcat (a major component of Enerbility's NAV via the parent) is exposed to US tariff risk and dealer-channel destocking.

### 8. The CCPP / supply-only EPC margin is structurally low-teens
- Even on the bull-case gas-turbine bundles, the **expected gross profit margin from the supply-and-installation package is in the low teens (%)** — not exactly a high-margin software-like business once the order multiplier compresses [the Q1 conference call detail in 607957818].

---

## Synthesis

The bull case is a **multi-year structural backlog story**: Czech → UAE/Saudi → US SMR → US gas turbine, with optionality as the OEM-agnostic equipment manufacturer that wins regardless of which SMR design crystallises [3][8]. The risk-reward was clearly asymmetric in early 2025 when CLSA was still on HC O-PF at ₩28,950 [11]. After a ~3-4x re-rating, the bear case is no longer about the *existence* of the thesis but about **execution timing (orders slipping by a quarter or two creates sharp drawdowns), governance (rights issues / restructurings without warning), legacy project losses (1Q25 Vietnam was ₩142bn-level material), and a TP cluster (FactSet range ₩95k–₩195k) where today's price is already mid-range** [20][21].

**Net read**: the directional thesis is intact and recent sell-side initiations confirm continued constructive coverage (LS Securities Buy ₩150,000, Haitong O-PF ₩131,574, FactSet avg ₩144k) [20][21], but the cushion has narrowed materially. From here, the trade requires the order pipeline (Czech main-contract signature, US gas-turbine first contracts in 2H25, NuScale's first commercial customer commitment) to materialise on schedule.

---

**Sources**

[1] CLSA — Doosan Enerbility - O-PF (Half nuclear half amazing), 27 May 2025 — 607960659LinqAlpha.PDF
[2] CLSA — Doosan Enerbility - O-PF (Half nuclear half amazing), 27 May 2025 — 607960659LinqAlpha.PDF
[3] CLSA — Doosan Enerbility - O-PF (Half nuclear half amazing), 27 May 2025 — 607960659LinqAlpha.PDF
[4] CLSA — Doosan Enerbility - O-PF (Half nuclear half amazing), 27 May 2025 — 607960659LinqAlpha.PDF
[5] CLSA — Doosan Enerbility - O-PF (Half nuclear half amazing), 27 May 2025 — 607960659LinqAlpha.PDF
[6] CLSA — Doosan Enerbility - O-PF (Half nuclear half amazing), 27 May 2025 — 607960659LinqAlpha.PDF (Investment risks)
[7] CLSA — Doosan Enerbility - O-PF (Half nuclear half amazing), 27 May 2025 — 607960659LinqAlpha.PDF (Catalysts)
[8] CLSA — Doosan Enerbility - O-PF (Half nuclear half amazing), 27 May 2025 — 607960659LinqAlpha.PDF (Investment thesis)
[9] CLSA — Doosan Enerbility - O-PF (Half nuclear half amazing), 27 May 2025 — Revenue category table
[10] CLSA — Doosan Enerbility - O-PF (Half nuclear half amazing), 27 May 2025 — Order book history table + event log
[11] CLSA — Doosan Enerbility - HC O-PF (One step back for two steps forward), 1 May 2025 — 607957818LinqAlpha.PDF (1Q25 results)
[12] CLSA — Doosan Enerbility - HC O-PF (One step back for two steps forward), 1 May 2025 — 607957818LinqAlpha.PDF (Czech project)
[13] CLSA — Doosan Enerbility - HC O-PF (One step back for two steps forward), 1 May 2025 — 607957818LinqAlpha.PDF (SMR + gas turbine)
[14] CLSA — Doosan Enerbility - HC O-PF (One step back for two steps forward), 1 May 2025 — 607957818LinqAlpha.PDF (Q&A: SMR / Czech equipment / debt)
[15] CLSA — Doosan Enerbility - HC O-PF (One step back for two steps forward), 1 May 2025 — 607957818LinqAlpha.PDF (Gas turbine pricing vs. GE Vernova)
[16] CLSA — Doosan Enerbility - HC O-PF (One step back for two steps forward), 1 May 2025 — 607957818LinqAlpha.PDF (Gas turbine bottleneck)
[17] CLSA — Doosan Enerbility - HC O-PF (One step back for two steps forward), 1 May 2025 — 607957818LinqAlpha.PDF (Services business)
[18] StreetAccount — Doosan Enerbility Q1 OP KRW233.51B vs SA KRW214.85B (29 Apr 2026)
[19] StreetAccount — Doosan Enerbility Q1 Metrics Recap (orders / backlog, 29 Apr 2026)
[20] StreetAccount — LS Securities initiates 034020.KS Buy, TP ₩150,000 (18 May 2026)
[21] StreetAccount — Doosan Enerbility initiated Outperform at Haitong, TP ₩131,574 (30 Apr 2026)

## Citations

- [1] **607960659LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960659LinqAlpha.PDF>
- [2] **607960659LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960659LinqAlpha.PDF>
- [3] **607960659LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960659LinqAlpha.PDF>
- [4] **607960659LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960659LinqAlpha.PDF>
- [5] **607960659LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960659LinqAlpha.PDF>
- [6] **607960659LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960659LinqAlpha.PDF>
- [7] **607960659LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960659LinqAlpha.PDF>
- [8] **607960659LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960659LinqAlpha.PDF>
- [9] **607960659LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960659LinqAlpha.PDF>
- [10] **607960659LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960659LinqAlpha.PDF>
- [11] **607957818LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957818LinqAlpha.PDF>
- [12] **607957818LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957818LinqAlpha.PDF>
- [13] **607957818LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957818LinqAlpha.PDF>
- [14] **607957818LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957818LinqAlpha.PDF>
- [15] **607957818LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957818LinqAlpha.PDF>
- [16] **607957818LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957818LinqAlpha.PDF>
- [17] **607957818LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957818LinqAlpha.PDF>
- [18] **Doosan Enerbility reports Q1 operating profit KRW233.51B vs StreetAccount KRW214.85B** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4646178&_doc_date=2026-04-29&_doc_product=SA>
- [19] **StreetAccount Metrics Recap - Doosan Enerbility Q1 Earnings** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4646230&_doc_date=2026-04-29&_doc_product=SA>
- [20] **LS Securities initiates 028260.KS, 034020.KS** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4685887&_doc_date=2026-05-18&_doc_product=SA>
- [21] **Doosan Enerbility initiated outperform at Haitong** · news — <https://my.apps.factset.com/viewer-fusion/?_doc_id=sa_story_4649541&_doc_date=2026-04-30&_doc_product=SA>

