Buy Nuclear Power Stocks Through ETFs

President Yoon's Reversal of Nuclear Phase-Out
Pro-Nuclear Party's Active Support Boosts Nuclear-Related Stocks

Moves Like Thematic Stocks, Caution Advised
Benefits Vary by Project
Recommend Indirect Investment via ETFs Rather Than Individual Stocks

[Asia Economy Reporter Myunghwan Lee] Under the new administration, nuclear power has become the centerpiece of industrial policy. This is because President Yoon Seok-yeol has reversed the previous government's nuclear phase-out policy and launched a large-scale revival of nuclear power. As the president and the ruling party actively promote pro-nuclear policies, the stock prices of related companies have shown significant volatility. The securities industry recommends investing through exchange-traded funds (ETFs) because the degree of benefit varies depending on the business activities of nuclear-related stocks.

One of President Yoon’s key activities during his trip to Madrid, Spain, to attend the NATO summit held on May 29-30 (local time) was “nuclear power sales diplomacy.” On May 29, during a summit meeting with Dutch Prime Minister Mark Rutte, he said, "As the Netherlands is pursuing policies to expand the share of nuclear power, including new nuclear plant construction, I hope that our companies, which have world-class safety and price competitiveness, can contribute." The following day, on May 30, in a meeting with Czech Prime Minister Petr Fiala, he requested attention and support to allow Korean companies to participate in the Czech Republic’s new nuclear power projects. In line with President Yoon’s efforts, Lee Jun-seok, leader of the People Power Party, also visited the Wolseong Nuclear Power Plant in Gyeongju, North Gyeongsang Province, on May 30 to support the pro-nuclear policy.

As nuclear phase-out and nuclear industry promotion have emerged as major agendas of the new government, the stock prices of related companies have also risen sharply. According to the Korea Exchange, comparing stock prices on the first trading day of this year, January 3, and June 30, Hanshin Machinery’s stock price rose from 3,640 won to 9,450 won, an increase of 159.62%. Hanshin Machinery produces pneumatic compressors for nuclear power plants and is considered a beneficiary stock of the nuclear sector. Other companies such as BHI (71.60%), Hyundai Energy Solutions (67.99%), Boseong Powertech (67.40%), and Woojin (50.49%) also saw significant gains.

However, nuclear-related stocks tend to behave like thematic stocks, so caution is required. Before the presidential election, Hanshin Machinery’s stock price hovered in the mid-3,000 won range, but after President Yoon’s election, it surged sharply, reaching the 13,000 won range within two months. After fluctuating, it adjusted down to the mid-8,000 won range in mid-last month. Even among nuclear-themed stocks, the degree of benefit varies by individual stock, which should be taken into account. According to Hana Securities, even nuclear stocks engaged in similar businesses showed differentiated weekly returns ranging from -1% to 47% depending on the stock.

The securities industry recommends indirect investment through ETFs rather than direct investment in nuclear-related stocks. This is because investing in individual nuclear-related stocks carries the risk of not benefiting depending on the stock. According to the Korea Exchange, Korea Investment Trust Management’s ‘KINDEX Nuclear Theme Deep Search’ and NH-Amundi Asset Management’s ‘HANARO Nuclear iSelect’ were newly listed on the KOSPI market on May 28. These ETFs track nuclear-themed indices. The exchange explained, "While nuclear-themed products are limited in overseas markets, these ETFs are expected to enhance market diversity and broaden investors’ choices."

Hana Securities researcher Jae-hyuk Han advised, "By investing in funds that select excellent companies in the industry through ETFs without the process of choosing individual stocks, investors can achieve relatively lower risk and corresponding returns. We recommend choosing an investment method that suits each individual to not miss out on the nuclear market boom."

This content was produced with the assistance of AI translation services.