BHI Favored by Institutions Hits 52-Week High

Stock Up 63% This Month
HRSG Orders Surge, New Orders Expected to Reach 1.3 Trillion KRW
Operating Profit Up 775% Year-on-Year in First Half

Domestic institutional investors have been accumulating shares of BHI this month. As expectations for improved performance gain momentum, the company's corporate value is also rising rapidly.

According to the financial investment industry on October 30, BHI's stock price has surged 63.4% so far this month. During the same period, the KOSDAQ index fell by 2.6%, meaning BHI outperformed the market by 66 percentage points. On the previous trading day, BHI's stock price hit a new 52-week high, reaching 13,120 KRW during intraday trading. Its market capitalization has grown to 385 billion KRW. Domestic institutional investors have led the stock price increase by recording a net purchase of 21.5 billion KRW this month.

BHI designs, manufactures, installs, and constructs power generation equipment required for power plants and steelmaking processes. Its main clients include Korea Electric Power Corporation, power companies, power generation operators, major domestic and international construction firms, and steel companies. Power generation equipment is divided into main equipment and auxiliary equipment. The type of power generation and main equipment is determined by the fuel used to generate heat, while auxiliary equipment is commonly applied regardless of the generation type. BHI produces various types of main equipment such as boilers and heat recovery steam generators (HRSG), as well as auxiliary equipment including condensers, heat exchangers, and deaerators.

In the first half of this year, BHI posted cumulative sales of 159.4 billion KRW and operating profit of 9.5 billion KRW. Compared to the same period last year, sales decreased by 22%, but operating profit increased by 775%.

The growth of the artificial intelligence (AI) industry and the increase in electric vehicle sales are driving up energy demand. Countries are accelerating efforts to secure stable power sources by building power plants that utilize nuclear energy and natural gas. BHI expects that the rapid growth of power-intensive upstream industries such as AI, data centers, semiconductors, and electric vehicles will lead to continued follow-up investment in energy infrastructure equipment and facilities like power generation equipment.

Lee Sangheon, a researcher at IM Securities, stated, "The volume of new orders announced by BHI this year amounts to 1.1416 trillion KRW," adding, "The company plans to supply a total of six 600MW-class HRSGs to combined cycle power plants being built in the Taiba and Qassim regions of Saudi Arabia." He continued, "In May and July, BHI signed supply contracts for HRSGs for combined cycle power plants with Toshiba Plant Systems & Services, worth approximately 120 billion KRW and 274 billion KRW, respectively," and added, "New orders for this year are expected to reach 1.3 trillion KRW."

The small modular reactor (SMR) market is also expected to become a new growth engine for BHI. The government has decided to include plans for the construction of four SMRs in the '11th Basic Plan for Electricity Supply and Demand,' which will be announced at the end of this year. When four SMRs, each with an electric generation capacity of 170 to 350 megawatts (MW), are combined, their output is equivalent to that of one large nuclear power plant.

BHI has been building trust in the nuclear power sector, maintaining a long-standing partnership with Toshiba, a partner of Westinghouse in the United States. In 2013, BHI supplied auxiliary equipment for units 3 and 4 of the Vogtle nuclear power plant and units 2 and 3 of the Summer nuclear power plant in the United States. Recently, BHI signed a contract to supply auxiliary equipment for research reactors for small modular reactors with a domestic power generation public enterprise. As part of the 'Gyeongnam SMR International Conference' hosted by Gyeongsangnam-do, leading global SMR companies such as NuScale Power, TerraPower, Seaborg, and AtkinsR?alis visited BHI's headquarters to assess its manufacturing capabilities.