---
endpoint: analytics
pattern: Capital Goods
status: done
latency_ms: 199451
conversation_id: e7aca9fd-dcfa-4f50-9ebd-0b5238ed1e0a
citations: 11
created: 2026-05-31 21:38:36Z
---

# What are the key risks to Doosan Enerbility’s growth trajectory?

# Key Risks to Doosan Enerbility's (034020 KS) Growth Trajectory

Doosan Enerbility's growth thesis rests on three pillars — overseas nuclear orders (Czech, US, Middle East, Canada), the gas turbine ramp into North American data-center demand, and SMR equipment supply (NuScale, X-Energy, TerraPower). The risks below are organized by what could derail each pillar, drawing on CLSA's most recent coverage (the latest CLSA Doosan Enerbility report is dated **27-May-2025** [1]) and Doosan Enerbility's FY2025 disclosures.

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## 1. Order-Flow & Policy Risk (the most market-sensitive)

- **Czech contract slippage.** The flagship Czech Republic nuclear order was originally guided for **March 2025** but has been delayed; CLSA explicitly framed this as a risk in its April-2025 "Sanity check" note, while reiterating that the long-term thesis is intact [2]. The major-equipment portion alone is expected to approach **KRW 3.8tn**, so any further slippage materially affects 2025/26 order intake [6].
- **Korean domestic policy reversal.** With President Yoon impeached (4-Apr-2025 [8]), CLSA flagged "market concern over domestic nuclear policy changes" under an opposition-led government. CLSA's base case is that the next administration will **not** be as harsh as the previous Moon government, which halted nuclear plant construction, but the risk is non-zero — domestic nuclear orders are scheduled for 2028 (4× i-SMR modules) and 2029 (2× units in the 11th basic power plan) and could be pushed back [3].
- **Overseas nuclear policy / bidding-process changes.** "Doosan group's new order can be at risk depending upon changes in the overseas nuclear power plant business by Korean consortium, such as changes in government policies and the political environment, or changes in the bidding process" [7]. KHNP's withdrawals from the **Slovenia** and **Sweden** nuclear bids in early 2025 illustrate how fluid this pipeline is [8].
- **Share-price reflexivity to news flow.** Market expectations on nuclear have run hard on policy and overseas-project headlines, so "any major changes in the nuclear power plant outlook could lead to share price volatility" [1] — i.e., even pure news-flow shifts (Yoon impeachment, KHNP-Westinghouse settlement, Trump's nuclear deregulation EO, NuScale equity moves) drive the stock more than fundamentals in the short term [8].

## 2. Capacity / Supply-Chain Bottlenecks

- **Gas turbine — precision casting is the binding constraint.** Per management Q&A captured by CLSA: *"Precision casting components are the key bottleneck. Doosan is working with multiple global foundry partners in the US, Europe, Japan and Korea to jointly expand capacity"* [5]. If foundry partnerships under-deliver, the data-center-driven North American gas turbine ramp slips even though orders are available — **2026 capacity is already fully booked** [6], so the upside case depends entirely on debottlenecking 2027+ slots.
- **SMR — Changwon facility cap.** Doosan's Changwon plant can currently handle **12 SMR modules**, enough for either the **Rumanian 6-module project** OR one US project (some US projects scoping up to 12 modules each). Doosan plans to eventually support 20 units, but additional orders beyond current capacity require capex and lead time [6].
- **NuScale Rumanian project financing.** "Financing has been the major bottleneck in Rumania" [6]; until reached financial close, the Romanian backlog is at risk of delay or downsize. NuScale also has a track record of pulled projects (UAMPS / first US SMR cancelled in Nov-2023) [8].

## 3. Working Capital, Net Debt & Revenue Recognition

- **Front-loaded cash burn.** The business model is "inherently front-loaded, with significant cash outflows in early project phases" — management was targeting net debt of **KRW 2.6tn by year-end 2025** after a sharp 1Q25 increase [6]. As of Dec-2025, **floating-rate net liabilities stood at W2,720,959m (vs W2,029,872m the prior year)**, materially up YoY — a real interest-rate sensitivity if KRW rates stay higher for longer [9].
- **Percentage-of-completion accounting risk.** Doosan Enerbility recognizes revenue using the input method; its auditor (Samil PwC) flagged this as a **Key Audit Matter** because "total contract revenue is affected by various uncertainties related to the outcome of future events, such as contract modifications, claims and penalties" [10]. With backlog scaling to KRW 23tn (FY2025) and 36tn (guided 2029) [8], any cost over-runs or **delay penalties** on multi-year mega-projects (Czech, Saudi, Qatar CCPPs) translate directly into margin reversals.
- **FX exposure.** "The Group is exposed to exchange rate fluctuation risks from various currencies as it operates globally" — USD, EUR, JPY, GBP all material. Doosan uses natural hedging plus currency forwards, but residual exposure remains [11].

## 4. US Trade / Tariff Risk

- **Direct exposure is currently small but growing.** On a **parent basis**, DE has limited direct US revenue today — upcoming major nuclear orders are skewed to Middle East, Europe, and Korea, and gas turbines are still Korea-only [4]. However, **SMR and gas turbine exports to the US could see complications in the long term** if Trump-era tariffs widen, and it is "still too early to quantify an actual impact" [4].
- **Indirect, via Doosan Bobcat.** Bobcat — the major earnings contributor on a consolidated basis — generates **>70% of its revenue in the US** [4]. Tariff/regulatory changes that compress Bobcat margins hit DE's consolidated P&L and SOTP value (Bobcat is the single largest investment asset at KRW 2.12tn before the 50% holdco discount).

## 5. Governance & Corporate-Action Risk

- **History of unexpected rights issues and controversial restructurings.** CLSA cites this directly in the investment-risks section of the May-2025 initiation: *"Doosan Enerbility has a history of unexpected rights issues and other restructurings, which is not ideal for minority shareholders"* [1]. The 2024 attempted Bobcat–Robotics merger (announced 22-Jul-2024 [8]) is the most recent example — scrapped in Aug-2024 after shareholder backlash, with the merger ratio later revised, then ultimately cancelled in Dec-2024.
- **Doosan Corp has continued the pattern in 2024**, prompting CLSA to apply a **50% discount on investment assets** (mostly Doosan Enerbility and Doosan Robotics) in its parent-co valuation due to "unexpected treasury share cancellation" — a structural valuation headwind for the holdco optic on DE [7].

## 6. Competitive / Substitution Risk in Gas Turbines

- DE's 380MW DGT-300H is "Korea's only and world's fifth 380MW gas turbine" — implying entrenched OEM incumbents (GE Vernova, Siemens Energy, Mitsubishi Power) globally. Discussions with North American customers are still in the **"exploring"** phase pre-July/August 2025 updates [6]; commercial uptake is not yet booked into guidance.
- For SMRs specifically, while NuScale has "minimal direct competition in the SMR space" today (Gen III licensing lead, no HALEU requirement), competing Gen IV designs in development could pressure mid/long-term project pipeline [from CLSA Korea Nuclear note] — and DE's SMR business is umbilically tied to NuScale's commercial success.

---

## Risk Heat-Map (CLSA framing, May-2025)

| Risk Category | Time Horizon | Severity | Probability | Reference Catalyst to Watch |
|---|---|---|---|---|
| Czech order timing slippage | Near-term (2H25) | High | Medium | KHNP-Westinghouse settled Jan-2025 [8]; next: contract signing |
| Domestic nuclear policy shift | Near/Medium-term | Medium | Low-Medium | New government's stance on 11th basic plan execution [3] |
| Gas turbine capacity bottleneck | Medium-term | High | Medium | Foundry-partner capacity adds; July-Aug update [5][6] |
| NuScale Romanian project financing | Medium-term | Medium | Medium | Project financial close [6] |
| Net debt / WC pressure | Near-term | Medium | Medium | KRW 2.6tn YE25 net debt target vs actual [6][9] |
| Bobcat tariff hit (US) | Medium-term | Medium | Medium | US trade policy under Trump [4] |
| Group restructuring / dilution | Anytime | High | Low-Medium | Doosan Corp / DE corporate actions history [1][7] |
| Contract execution / margin slippage | Ongoing | Medium | Medium | POC delay penalties / claims [10] |

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## Bottom Line

The growth story is real — backlog is doubling (KRW 23tn FY25 vs KRW 16.2tn FY24, with KRW 36tn guided by 2029 [8]) — but it is **catalyst-driven and policy-sensitive**, with three concentrated dependencies: (1) Czech order execution, (2) North American gas-turbine debottlenecking, and (3) NuScale's Romanian financial close. Each of these can independently re-rate the stock by 15–30% on news flow. Layered on top is **idiosyncratic governance risk** that has materialized repeatedly (rights issues, treasury-share moves, controversial inter-affiliate restructurings) and is the single most-cited investor concern in CLSA roadshow feedback [1][7]. The annual-report risk taxonomy (FX, interest rate, POC contract-accounting uncertainty) is real but secondary — these become acute only if any of the three growth catalysts slips materially, exposing the front-loaded working-capital model [9][10][11].

---

**Sources**
[1] Doosan Enerbility – O-PF (Half nuclear half amazing) — CLSA (27-May-2025) — 607960659LinqAlpha.PDF
[2] Doosan Enerbility – HC O-PF (Sanity check) — CLSA (7-Apr-2025) — 607955198LinqAlpha.PDF
[3] Doosan Enerbility – HC O-PF (Sanity check), Domestic policy risk — CLSA (7-Apr-2025) — 607955198LinqAlpha.PDF
[4] Doosan Enerbility – HC O-PF (Sanity check), No major US exposure for now — CLSA (7-Apr-2025) — 607955198LinqAlpha.PDF
[5] Doosan Enerbility – HC O-PF (One step back for two steps forward), Q13 bottleneck — CLSA (1-May-2025) — 607957818LinqAlpha.PDF
[6] Doosan Enerbility – HC O-PF (One step back for two steps forward), Q&A on NuScale, Czech, capacity — CLSA (1-May-2025) — 607957818LinqAlpha.PDF
[7] Doosan – O-PF (A quantum jump in parent OP), Investment risks & valuation discount — CLSA (1-May-2025) — 607957823LinqAlpha.PDF
[8] Doosan Enerbility – HC O-PF (One step back for two steps forward), Figure 11 share-price event timeline — CLSA (1-May-2025) — 607957818LinqAlpha.PDF
[9] Doosan Enerbility FY2025 Annual Report (English) — Interest-rate risk, floating-rate net liabilities — Samil PwC audit (filed Mar-2026)
[10] Doosan Enerbility FY2025 Annual Report (English) — Key Audit Matter: revenue recognition under input method — Samil PwC
[11] Doosan Enerbility FY2025 Annual Report (English) — Financial risk management: foreign currency risk — Samil PwC

## Citations

- [1] **607960659LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607960659LinqAlpha.PDF>
- [2] **607955198LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607955198LinqAlpha.PDF>
- [3] **607955198LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607955198LinqAlpha.PDF>
- [4] **607955198LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607955198LinqAlpha.PDF>
- [5] **607957818LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957818LinqAlpha.PDF>
- [6] **607957818LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957818LinqAlpha.PDF>
- [7] **607957823LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957823LinqAlpha.PDF>
- [8] **607957818LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607957818LinqAlpha.PDF>
- [9] **Doosan Enerbility Co., Ltd. (034020-KR) - Annual Report for period end 31-Dec-2025 (English) - PDF** · external
- [10] **Doosan Enerbility Co., Ltd. (034020-KR) - Annual Report for period end 31-Dec-2025 (English) - PDF** · external
- [11] **Doosan Enerbility Co., Ltd. (034020-KR) - Annual Report for period end 31-Dec-2025 (English) - PDF** · external

