[Click eStock] "This Year, Nuclear Power Investment Shifts from 'Operation' to 'Construction'"

Construction Cycle Expected to Become Visible This Year
Western Investment Focus Likely to Shift from 'Operation' to Construction

Securities analysts have forecast that global nuclear power investment targets are expected to shift from a focus on operations and fuel to construction and manufacturing.

Moonjoon Jang, a researcher at KB Securities, stated on March 5, "Up until now, global nuclear power investment has been explained mainly in terms of fuel prices and operational performance. However, if the construction cycle becomes visible, nuclear power will start to be seen not as an 'operating asset' but as a 'building industry.'"

He continued, "Rather than the operational income expected after completion, orders, construction, and manufacturing will be reflected in earnings first in numerical terms. This is why we believe there is a high possibility that global investors' attention will expand beyond uranium and utilities to include listed companies directly linked to nuclear power plant construction."

Jang explained that, unlike in Asia where nuclear power plants have continued to be built, for Western investors, nuclear power has long been regarded as an 'operating asset.' Since the 1990s, new nuclear power plant construction in the West has essentially halted, and in the United States, only two plants have proceeded from groundbreaking to commercial operation since 1978. Jang added, "In contrast, countries such as Korea and China have continued to build nuclear power plants, and in industries where construction continues, orders, manufacturing, processes, management, and supply chains are directly connected to earnings. The presence or absence of construction experience has shaped the differences in investment frameworks."

There are also differences in the composition of global nuclear power ETFs. Most nuclear power ETFs listed in the West are heavily weighted toward uranium, the fuel. For example, uranium companies account for 60% to 100% of the top holdings in major nuclear industry ETFs such as the Sprott Uranium Miners ETF (URNM), VanEck Uranium & Nuclear Energy ETF (NLR), and Global X Uranium ETF (URA). The next largest holdings are 'utility' companies that operate nuclear plants. In contrast, Korean nuclear power ETFs such as HANARO Nuclear Power iSelect, TIGER Korea Nuclear Power, and ACE Nuclear Power TOP10 have a higher proportion of companies involved in parts manufacturing and EPC (engineering, procurement, and construction). Jang explained, "KB Securities believes this is not just a simple market structure difference, but rather reflects regional differences in how nuclear power has been perceived."

Jang concluded, "Although price volatility of Korean nuclear power stocks has been high since the beginning of the year, the strategy remains valid: focus on large-scale nuclear power plant value chains rather than SMRs, on Korean nuclear power companies rather than American or overseas firms, and on companies with project management and execution capabilities rather than those merely in design or infrastructure."

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