[Click eStock] "Doosan Fuel Cell, Policy Confusion Likely to End with Hydrogen Act Passage"

[Asia Economy Reporter Myunghwan Lee] Eugene Investment & Securities evaluated on the 6th that the fundamental damage to Doosan Fuel Cell will come to an end with the passage of the partial amendment bill on the Act on the Promotion of Hydrogen Economy and Hydrogen Safety Management (hereinafter referred to as the Hydrogen Act). Along with this, it maintained a buy investment opinion and a target price of 75,000 KRW.

According to Eugene Investment & Securities, the Hydrogen Act passed the relevant subcommittee of the Industry, Trade, and Small and Medium Venture Business Committee on the 4th. After a formal review by the Legislation and Judiciary Committee, only the plenary session vote remains. Since the ruling party, the Democratic Party of Korea, which holds an absolute majority, led the bill, Eugene Investment & Securities believes it will be promulgated as final law without any surprises. The enforcement date will be six months after promulgation. Accordingly, the domestic hydrogen power generation-related market will be operated under the Renewable Portfolio Standard (RPS) system until this year, but from next year, it will be operated under the supply ratio system and bidding market according to the Hydrogen Act.

The main policies of the Hydrogen Act include ▲ introduction of a separate natural gas tariff system for hydrogen power generation ▲ obligation to sell and use clean hydrogen ▲ purchase and supply system of hydrogen power generation volume by electricity business operators ▲ introduction of a hydrogen power generation bidding market. During the preparation period for securing clean hydrogen, the use of natural gas reforming hydrogen is allowed, but the use of clean hydrogen is mandated in the mid to long term with financial support provided. Electricity business operators above a certain scale must fill part of their power generation with hydrogen power. The increased cost burden on electricity business operators due to this can be reflected and recovered in electricity rates. The Minister of Trade, Industry and Energy can impose punitive fines if the above sales and usage obligations are not fulfilled.

The basic framework of the Hydrogen Act is to increase hydrogen power generation based on clean hydrogen, and it is analyzed that the executive branch has significant authority to determine detailed matters. Considering the next government's policy direction to foster the hydrogen industry, Eugene Investment & Securities analyzed that the growth trend of the domestic hydrogen power generation industry will become stronger.

So far, Eugene Investment & Securities evaluated that the decline in Doosan Fuel Cell's stock price and poor performance were due to delays in the Hydrogen Act. Researcher Byunghwa Han of Eugene Investment & Securities said, "Since discussions on hydrogen with the bidding market in mind began last year, it is judged that orders for this year as well as from next year onward will be smoothly secured," and analyzed, "The company's phosphoric acid fuel cell (PAFC) technology makes power generation using clean hydrogen relatively easy, maintaining high preference among power generation operators."

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