Nuclear stocks soar on hopes of Korean power plant project in Poland

President Yoon Suk-yeol looks at a miniature of the domestically developed ARP1400 nuclear reactor at Doosan Enerbility in Changwon, South Gyeongsang on June 22. [NEWS1]

Nuclear stocks skyrocketed Tuesday, as expectations are rising about Korea signing a nuclear power plant project deal with Poland’s Patnow.

If the plan goes ahead, the Patnow project will be Korea’s first full nuclear power plant export in 13 years after the Barakah project in the United Arab Emirates.

Shares of Doosan Enerbility, a nuclear reactor equipment supplier, surged 19.62 percent to trade at 15,850 won ($11) on the main Kospi bourse Tuesday.

Doosan Enerbility is the only domestic company that manufactures key components for nuclear power plants such as reactor vessels and steam generators. It supplied the main components of the domestically-developed APR1400 reactors for the Barakah nuclear power plant project.

APR1400 reactor technology will also be used for the Patnow project, said Korea Hydro & Nuclear Power (KHNP).

Doosan Enerbility's share price had been sluggish during the previous Moon Jae-in administration's nuclear phaseout, hitting a low of 2,470 won on March 23, 2020. But it has since bounced back. President Yoon Suk-yeol, which has been adamant about reversing the former administration's nuclear-exit policy, visited the company's factory in Changwon, South Gyeongsang, in June to promise active government support in the sector.

Kospi-listed Kepco Engineering & Construction (Kepco E&C) soared 29.91 percent to 64,500 won. Kepco E&C is a nuclear reactor developer 65.77 percent owned by Korea Electric Power Corporation (Kepco), the state-owned power supplier. Kepco E&C developed the APR1400 reactor.

Kepco KPS — a nuclear power plant maintenance company 51 percent owned by Kepco — jumped 11.76 percent to close at 35,650 won.

Though the engineering, procurement and construction contractor for the project is yet to be decided, constructors such as Hyundai E&C and Daewoo E&C also traded strong on the expectation of a possible deal. Hyundai E&C climbed 6.73 percent to 37,250 won and Daewoo E&C increased 6.06 percent to close at 4,460 won.

The Tuesday rally came as KHNP signed a letter of intent on Monday with Poland’s Zespol Elektrowni Patnow-Adamov-Konin and state-owned Polska Grupa Energetyczna for the 1.4-gigawatt Patnow project.

While the letter of intent is not a legally binding contract, Poland's Deputy Prime Minister and Minister of State Asset Jacek Sasin said Monday that Korea is "100 percent" guaranteed to be a partner in the project.

The Patnow project is expected to be worth over 15 trillion won, according to Moon Gyeong-won, a Meritz Securities analyst.

“As the technology for the nuclear power plant export will be based on the APR1400 reactor, it is highly likely that Kepco E&C to oversee the design and Doosan Enerbility to supply the components,” said Moon.

KHNP initially bid for another project in Poland — the government-led Lubiatowo-Kopalino nuclear plant — which is worth $40 billion, yet failed to win the deal. Westinghouse Electric, a U.S. company, was chosen to build the project Friday.

The Patnow project, on the other hand, is a comparatively smaller, private-led project to build two to four reactors on the site of Poland's Patnow thermal power plant, which will shut down in 2024.

The plan for the nuclear project is to be completed by the end of this year.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]