NH Investment & Securities announced on September 7 that it has raised its target price for Doosan Fuel Cell from 34,000 won to 58,000 won, citing reduced uncertainty regarding the company's long-term growth following a contract for fuel cells for U.S. data centers. The investment opinion was also upgraded from 'hold' to 'buy.'
Research analyst Jeong Yeon-seung stated, "We successfully secured a contract for fuel cells for data centers through our U.S. affiliate, HyAxiom. The contract amount is 501.4 billion won, and it is estimated that a higher price per unit has been applied compared to recent domestic contracts, suggesting the order size is approximately 140 MW."
He added, "Considering the absolute supply scale, it is highly likely that these fuel cells will be used as the main power source rather than as auxiliary power for data centers. This contract confirms that phosphoric acid fuel cells (PAFC), which have lower efficiency than solid oxide fuel cells (SOFC), can also enter the U.S. data center power market."
Jeong also noted the potential for additional PAFC orders due to increasing on-site power generation demand in the U.S., stating, "The contract for fuel cells for U.S. data centers has alleviated uncertainties regarding long-term growth."
He projected a possibility of turning a profit by 2027, explaining, "Based on the orders secured so far, we have secured an annual production volume of over 250 MW of fuel cells. Revenue is expected to expand to 882.1 billion won by 2027, and with PAFC production capacity set to increase to 350 MW annually, there is ample capacity to handle additional orders."
However, he cautioned that in 2026, there will be financial burdens due to the costs associated with replacing stacks of previously supplied fuel cells and low operating rates, leading to annual operating losses and increased working capital. He concluded, "From 2027 onwards, production volumes are expected to increase significantly, which will ease fixed cost burdens and enable a return to operating profit."
* This article has been translated by AI.
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