Korea nuclear EPC Q2 nuclear orders remain subdued, while JPMorgan cut order assumptions but kept all three companies at Overweight.

Overview

This report covers Korean nuclear EPC-related companies Doosan Enerbility, KEPCO E&C and Hyundai E&C. JPMorgan noted that overall Q2 order performance was still decent, but nuclear orders were still muted, with only one W33bn contract for emergency maintenance at an existing nuclear plant. Due to political complexity and prolonged execution timelines for offshore nuclear projects, the analyst pushed several overseas nuclear order assumptions out by 1-2 years, lowering the 2026-2028E order-book estimate and target prices. Despite this, the report maintains Overweight ratings for all three companies, arguing that the market has largely already priced in the scenario of missing large nuclear orders this year, while medium-term offshore EPC and SMR catalysts remain intact.

Core views

The core view is that short-term nuclear order momentum is below prior expectations, but the medium-term sector thesis is unchanged. Doosan benefits from exposure to gas/steam turbines, CCPPs and diversified nuclear positioning, making it the top pick; KEPCO E&C's order mix depends on KHNP/KEPCO offshore projects, and its 2027 pipeline is expected to re-accelerate with Vietnam-related projects; Hyundai E&C had strong non-nuclear orders in Q2, and its Bosnia Kozloduy and Holtec-related nuclear pipeline still offers upside, though the Fermi project was delayed to 2029.

Analysis framework

The report uses the order book as a core cycle metric, combining Q2 order disclosures, offshore nuclear project timelines, earnings visibility, consensus comparisons and valuation multiples to re-rate target prices for the three firms. Doosan and KEPCO E&C are mainly valued using 2028E price/orderbook multiples, while Hyundai E&C uses a 2028E P/BV multiple and references valuation levels from the roughly 15% ROE period in 2010-2012.

Methodology notes

• Valuation methodssum-of-the-parts

  Doosan target price derivation

  The Doosan Dec-27 target price of W130,000 is derived from a sum-of-the-parts valuation, with the core business using an uplift-cycle 2028E price/orderbook multiple of 1.9x.

• Valuation methodsprice/orderbook multiple

  Order-book cycle valuation

  The report views the order book as a key cycle indicator for Korean nuclear EPC, and the KEPCO E&C target price of W180,000 is based on a 2028E price/orderbook multiple of 1.9x.

• Valuation methodsprice-to-book multiple

  Hyundai E&C valuation

  The Hyundai E&C Dec-27 target price of W170,000 is based on a 2028E P/BV multiple of 1.8x, benchmarked to valuation levels when the company achieved around 15% ROE in 2010-2012.

• scenario and order assumptionstop-down nuclear project order forecast

  Overseas nuclear order reshuffle

  The report shifts U.S. nuclear assumptions from 2028 to 2029 and reassigns portions of Bulgaria, domestic Korea and Holtec orders to 2026-2027 or later.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Doosan Enerbility (034020.KS)

  Sector top pick, with exposure to large-scale nuclear, SMR and gas/steam turbines

  Strengths

  Strong U.S. gas/steam turbine and CCPP demand, expanding order book, and balanced exposure to nuclear and non-nuclear businesses.

  Weaknesses

  Muted 1H nuclear orders, with Bulgaria and domestic Korea nuclear projects delayed.

  Comparison

  Compared with other Korean nuclear EPC peers, Doosan is seen as having a more balanced order book, and therefore remains the top pick.

  Risks

  Delays in large nuclear projects, adverse SMR customer approvals or technology progress.

• KEPCO E&C (052690.KS)

  A key engineering and EPC-related player in Korea's dominant nuclear projects

  Strengths

  Holds a critical role in Korea-led nuclear projects; Vietnam projects and follow-on Ninh Thuan 2-related projects could re-accelerate the 2027 pipeline.

  Weaknesses

  Won only a W33bn maintenance contract in Q2; larger orders remain dependent on KHNP/KEPCO offshore bidding wins.

  Comparison

  Order elasticity is high, but the business is more dependent on government-to-government and upstream owner project progress.

  Risks

  KEPCO large nuclear project delays, political tensions and disputes between KEPCO and Westinghouse, and adverse iSMR progress.

• Hyundai E&C (000720.KS)

  A nuclear construction partner with strong non-nuclear construction order momentum

  Strengths

  Won W10tn of orders in Q2, including about W5.6tn in the Apgujeong 3rd District; Westinghouse-related nuclear projects still have upside.

  Weaknesses

  No near-term nuclear orders; slower-than-expected profit contribution from high-margin nuclear projects.

  Comparison

  Non-nuclear orders are stronger, but nuclear order realization is slower, and valuation is more anchored to P/BV and ROE cycles.

  Risks

  Large nuclear project delays, adverse Holtec approvals or technological progress, and additional impairment or cost pressure in overseas oil and gas projects.

Key data

• Doosan Enerbility target priceW130,000, previous W160,000; current price W74,000Overweight maintained; 2026-2028E order-book estimate revised down by 5-17%.
• KEPCO E&C target priceW180,000, previous W260,000; current price W95,400Overweight maintained; 2026-2028E order-book estimate revised down by 3-31%.
• Hyundai E&C target priceW170,000, previous W180,000; current price W100,500Overweight maintained; 2026-2028E order-book estimate revised down by 12-21%, and OP estimate revised down by 1-29% due to slower high-margin nuclear contribution.
• Q2 nuclear ordersKEPCO E&C W33bn maintenance contractThe report says this is the only disclosed nuclear-related contract and is relatively small.
• Q2 non-nuclear ordersDoosan W2.4tn; Hyundai E&C W10tnHyundai E&C orders include the Apgujeong 3rd District reconstruction project of about W5.6tn.
• Doosan potential near-term ordersCzech Dukovany construction tranche, about W3tnThe report expects Doosan could win this order in the next quarter.

Impact & implications

The investment implication is that short-term catalysts for the sector shift from large nuclear orders within the year to orders converting in 2027 and beyond, requiring a reset in valuation and order-book expectations; however, non-nuclear orders, gas turbine demand, SMR and the offshore EPC pipeline provide medium-term support for shares. Relative to KEPCO itself, the report prefers nuclear EPC players because offshore EPC catalysts have higher visibility and relatively lower policy risk.

Risks

• Large offshore nuclear projects continue to be delayed, leading to further downward revisions in order books and target prices.
• Government-to-government decisions or geopolitical frictions in Korea, the United States, Vietnam, Bulgaria, and elsewhere affect project timelines.
• Political tension or disputes involving KEPCO and Westinghouse could affect award decisions.
• SMR customer approvals, technical milestones, or commercial progress are weaker than expected.
• Hyundai E&C could face additional impairment or cost pressure in overseas oil and gas projects.

What to watch

• Whether the approximately W3tn construction portion of the Czech Dukovany project is awarded to Doosan as scheduled.
• Government-to-government MOUs and bidding progress for Vietnam nuclear projects and follow-on projects after Ninh Thuan 2.
• The pacing of budget allocation for U.S. Fermi, Holtec, and Korea-to-U.S. infrastructure investment.
• How quickly the Bulgarian Kozloduy project advances after changes in government.
• Whether Q2 earnings for the three companies broadly match BBG consensus and whether overseas problem projects are truly nearing completion.