Macquarie Korea Nuclear

Macquarie Equity Research 21 September 2026

ETAC (Energy Transition and Commodities)

Industrials Korea nuclear Korea

Beyond expectations - what to watch Jaeseo James Key Points Lee Hong

• Korea-US investment framework announcement has been delayed further, with a parliamentary briefing now expected on Sep 22. KR nuclear coverage • Beyond the headline investment amount, Korean suppliers' CP TP Up/dn Company Rec. (Won) (Won) (%) participation and potential inclusion of APR1400 are key swing factors. Doosan Enerbility (034020 KS) OP 84,900 120,000 41% • Our pecking order is Doosan Enerbility > Hyundai E&C > BHI > KEPCO. Hyundai E&C (000720 KS) OP 124,800 135,000 8% BHI (083650 KS) OP 64,300 107,000 66% KEPCO (015760 KS) N 30,750 40,000 30% • Investor' interest growing despite delays. Korean nuclear stocks have Source: Bloomberg, Macquarie Research, September outperformed over the past month, driven by growing expectations 2026; prices as of 20 September 2026 around the Korea-US investment framework. After repeated delays, the parliamentary briefing and MOU signing are now reportedly being KR nuclear value chain valuation rescheduled for Sep 22-23. Three key things to monitor: 1) the extent to P/E (x) P/BV (x) which Korean companies can secure binding procurement commitments 2027E 2028E 2027E 2028E for US projects, 2) the potential inclusion of Korean-designed APR1400 Doosan Enerbility Hyundai E&C reactors in the proposed eight-reactor nuclear package, and 3) the terms BHI of Korea's potential equity investment in Westinghouse, particularly the KEPCO 2.0 2.0 0.3 0.3 size of the stake and governance rights. Source: Bloomberg, Macquarie Research, September • Japan moves faster; Korea seeks firmer commitments. Japan has 2026; prices as of 20 September 2026 moved ahead with its US$550bn investment commitment, announcing six projects worth US$109bn across two rounds in February and March Related research 2026. While both countries have secured preferential treatment for home-grown suppliers under their respective US investment MOUs, Doosan Enerbility - US catalysts are stacking up (7 Sep 2026) neither of the agreements guarantee specific procurement contracts or Korea nuclear - US$22bn Encinal project adds minimum order allocations. The key difference lies in execution; Japan another angle (7 Sep 2026) has proceeded with project announcements based on expressions Hyundai E&C - Korea-US investment framework could of interest from domestic suppliers, while Korea is reportedly seeking create upside to our 2030 backlog forecast (7 Sep greater clarity on Korean companies' participation at the individual 2026) project level before moving forward. Korea nuclear - From narrative to orders (3 Sep 2026) • Beyond the headline amount, what could surprise the market? While BHI - Mixed bag, nuclear upside intact (18 Aug 2026) expectations are for a multi-project investment package, we believe the key swing factor is not the headline investment amount, but how much of it translates into tangible orders for Korean companies. Positive surprises could include: 1) the inclusion of APR1400 reactors in the proposed eight-reactor package, 2) binding procurement commitments for Korean suppliers, and 3) near-term gas turbine/EPC orders from the Texas Encinal project. The potential offer of an equity stake in Westinghouse could also be a positive if accompanied by meaningful governance rights and commercial cooperation. Conversely, smaller- than-expected roles for Korean companies, an equity investment without corresponding commercial benefits, or further delays in project financing and procurement could disappoint investors. • Doosan Enerbility is our top pick. Following the recent rally in Korean nuclear stocks, we see scope for near-term profit-taking when the announcement is finally made. However, we would view any correction as an attractive buying opportunity, particularly for Doosan Enerbility. Importantly, the US DOE's nuclear supply chain loan programme represents a separate catalyst beyond the Korea-US investment framework, potentially unlocking long-lead equipment procurement and improving order visibility by year-end. For important disclosures and…