[Photo by Doosan Heavy Industries & Construction Co.]
South Korea’s Doosan Heavy Industries & Construction Co. has risen fast from last year’s default crisis that required state bailout as its devastation from government policy to phase out from nuclear and fossil fuel improved on state-backed transition to a builder behind renewable infrastructure and Korea-U.S. agreement to partner in exploration of global nuclear reactor market.
Doosan Heavy I&C share price has more than doubled since May 24 after South Korean President Moon Jae-in and his U.S. counterpart Joe Biden in their summit agreed on cooperation in overseas nuclear markets.
Its shares soared from 14,550 won ($13.10) on May 24 to close at 32,000 won on Monday, pushing up its market value by more than 10.6 trillion won.
Doosan Heavy enjoyed a monopoly in nuclear reactor projects that made up a quarter of its revenue, but its heyday came to a stop with the government’s nuclear phase-out policy. Its business was devastated by cancellation of nuclear projects and Covid-19, sending its stock price shrivel to 2,000 won and market cap to around 600 billion won early last year.
It had to undergo painstaking restructuring including sales of its flagship unit Doosan Infracore and its headquarters building Doosan Tower in exchange for about 3 trillion won worth financial support from state banks. At the end of last year, it issued new shares to existing shareholders to bolster capital by 1.2 trillion won.
Fortune turned around this year on rapid recovery in the global nuclear power market.
It swung to a profit for the first time in 11 quarters in the first quarter ended March by posting 372.1 billion won in operating profit and 248.1 billion won in net profit.
The recovery has been gathering momentum after Moon and Biden agreed to cooperate in overseas nuclear projects during their summit on May 21, and the company’s offshore wind farm was cited as an exemplary case of a business’ green growth project at the P4G Seoul Summit.
Doosan Heavy’s resurgence has also been driven by its continuous investment in small modular reactors (SMRs) and renewable energy. A SMR boasts improved safety by containing major components such as pressurizer, steam generator and reactor coolant pumps in a single reactor. U.S. billionaire Bill Gate also ventured into the SMR business by establishing startup TerraPower.
Doosan Heavy signed a business agreement with U.S. SMR developer NuScale Power in 2019 and pledged $44 million in investment jointly with local companies including IBK Securities.
It has also won a 1.5 trillion won worth order to supply main parts of an SMR to be built in Idaho.
Doosan heavy has also been ramping up its renewable energy push in order to achieve its goal to increase the share of renewable energy business to 60 percent in its business portfolio by 2025.
It has initiated a project to build a hydrogen-fueled gas turbine by signing a business partnership with Ulsan Metropolitan City, Korea East-West Power and SK Gas. It also plans to build a 8-megawatt (MW) offshore wind farm by 2022. Of the total 130.5MW wind farms installed in the country, Doosan Heavy was responsible for 96MW.
By Moon Ga-young and Choi Mira
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]