Woori Technology's stock price is soaring. As artificial intelligence (AI) technology advances, securities firms' analysis that small modular reactors (SMRs) will gain attention due to increased power consumption appears to be influencing the stock price.
As of 9:49 AM on the 12th, Woori Technology was trading at 1,477 KRW, up 146 KRW (10.97%) compared to the previous trading day.
Meritz Securities predicted that this year will continue the search for post-AI beneficiary stocks, expecting the next trend to be in the energy sector. They anticipated that as AI usage and data centers increase and power infrastructure expands, interest will focus on the amount of energy consumed by AI itself.
ChatGPT is known to consume 10 times more power than Google search. AI-based image generation consumes 60 times more power than text generation. Considering future expansions into video generation, robotics, and the learning process, Meritz Securities analyzed that the increase in power consumption will be difficult to estimate.
Large nuclear power plants and SMRs are emerging as suitable power sources for data centers due to their high utilization rates and small installation areas. Big tech companies such as Microsoft (MS) and Amazon have started investing in large nuclear power plants and SMRs since last year. Sam Altman's 'Oklo' is also scheduled to go public this year.
Mungyungwon, a researcher at Meritz Securities, stated, "Woori Technology is a stock that can practically benefit from the SMR business domestically," introducing that "Woori Technology's sales composition includes nuclear power (38%), railroads and SOC (23%), and defense (33%)."
He added, "In terms of profit contribution and growth potential, nuclear power is definitely the core business division," explaining that "they manufacture the DCS, a key component of the MMIS, a nuclear power plant instrumentation and control system." He further noted, "Since succeeding in localization, they have supplied to Shinhanul Units 1, 2, 3, and 4, and Saeul Units 3 and 4," adding that "they are one of the 18 small and medium enterprises participating in Korea's i-SMR project."
The researcher said, "With localization achievements appearing this year and next, nuclear power sales are expected to increase by 30% and 34% compared to the previous year, respectively," and "profits are expected to increase by 76% and 57%, respectively." He forecasted, "Growth speed could accelerate further from 2026, with increased parts supply and maintenance sales for Shinhanul Units 3 and 4."
Woori Technology achieved record-high sales last year on a consolidated basis, recording sales of 63.2 billion KRW. During the same period, operating profit and net income increased by 39.11% and 36.74% year-on-year, reaching 6.7 billion KRW and 4.6 billion KRW, respectively.
The strong performance is attributed to sales growth in the nuclear power business based on the exclusive nuclear power plant instrumentation and control system (MMIS) technology. MMIS is a system that integrally manages the operation, control, monitoring, and instrumentation of nuclear power plants. Woori Technology is the only domestic company supplying MMIS, having provided it to Shinhanul Units 1 to 4 and Saeul Units 3 and 4. They will also supply MMIS for any additional nuclear power plants constructed in the future.
Woori Technology's nuclear power business division is expected to continue growing this year. Last year, Woori Technology was selected as the exclusive supplier of the nuclear power control system for Shinhanul Units 3 and 4, achieving new orders exceeding 70 billion KRW. Sales related to Shinhanul Units 3 and 4 are expected to begin this year. In addition to new orders, they will continue to supply parts and spare parts for nuclear power plants where MMIS has already been delivered.
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