Bernstein Highlights 2 Asian Nuclear Power Stocks to Watch

Bernstein identifies Doosan Enerbility and Cameco as key beneficiaries of the nuclear renaissance, driven by global energy security concerns. Doosan Enerbility, a top pick, is positioned for significant SMR manufacturing growth, targeting 20 units annually by 2030 with strategic partnerships and a $2.7 billion backlog, projecting KRW14 trillion revenue by 2030 and rising operating margins. Cameco is favored as the Western fuel-cycle champion, benefiting from U.S. nuclear resurgence, its stake in laser enrichment, expanded services via Westinghouse, and strong uranium assets, attracting new Buy/Outperform ratings.

Analysis

A renewed global focus on energy security is catalyzing a 'nuclear renaissance,' with analysis from Bernstein highlighting two key companies poised to benefit: Doosan Enerbility and Cameco. Doosan Enerbility is positioned as a primary manufacturing beneficiary, particularly within the nascent Small Modular Reactor (SMR) segment. The company is targeting an aggressive production ramp-up to 20 SMR units annually by 2030, underpinned by strategic manufacturing agreements with major developers like NuScale, X-energy, and TerraPower. Financially, this translates to a projected revenue of KRW14 trillion by 2030, representing an 8% compound annual growth rate and notably exceeding the company's own guidance. Furthermore, a strategic pivot towards higher-margin nuclear and gas turbine equipment is expected to drive operating profit margins from 3% in 2024 to approximately 9% by 2027. This outlook is supported by new Buy ratings from Nomura and HSBC, though JPMorgan initiated with a more cautious Neutral rating. Concurrently, Cameco is identified as the premier Western fuel-cycle investment. Its value proposition is diversified beyond its core of high-quality, low-cost uranium assets, now including recurring reactor and fuel services through its Westinghouse ownership. A key potential catalyst is its stake in next-generation laser enrichment (GLE), which could become a protected, high-return business should the U.S. prioritize domestic enrichment capacity. This, combined with signals of an expanding U.S. strategic uranium stockpile and a disciplined management team generating healthy free cash flow, has attracted new Buy and Outperform ratings from Goldman Sachs and CLSA.

Key Decisions for Investors

• Investors seeking exposure to the nuclear sector have two distinct entry points: Doosan Enerbility for the industrial and equipment manufacturing cycle, and Cameco for the commodity fuel cycle and services segment.
• For Doosan Enerbility, monitor the conversion of its SMR partnerships into firm orders and its ability to meet production targets, as achieving the projected 8% revenue CAGR and 9% operating margin by 2027 is contingent on successful execution in this new market.
• For Cameco, key signposts to watch are U.S. policy announcements regarding the strategic uranium stockpile and domestic enrichment, as these would directly de-risk and enhance the value of its GLE investment and core uranium operations.
• The strong bullish consensus from multiple analysts on both companies is a positive signal, however, JPMorgan's Neutral rating on Doosan suggests investors should remain diligent on valuation and potential execution risks associated with its aggressive growth targets.