Korea Nuclear EPCs Our thoughts and preference post strong YTD rally

Research evidence excerpt

Korea Nuclear EPCs Our thoughts and preference post strong YTD rally

13 May 2026

Korea Nuclear EPCs EquitiesConstruction & Engineering

Our thoughts and preference post strong YTD rally Korea

◆ Another strong year for Korea E&C names powered by global Yushin Park*

nuclear revival and Middle East rebuild opportunities Analyst,The HongkongKoreaandIndustrialsShanghai&BankingUtilitiesCorporation

Limited, Seoul Securities Branch

◆ Our bullish view on nuclear remains unchanged, but earnings yushin.park@kr.hsbc.com

+82 2 3706 8756

contribution will diverge across names

* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

◆ Retain Buys on DEB, SSC&T, and HDEC; downgrade DWEC not registered/ qualified pursuant to FINRA regulations

to Reduce; revise TPs for SSC&T, DWEC, and GSEC

Another strong year: Korea E&C names are enjoying another strong year (KRX

construction index +126% YTD, outperforming KOSPI by c41%) on the back of:

1) nuclear; 2) Middle East rebuild opportunities; and 3) earnings and margin recovery

in domestic housing divisions. Despite the long absence of new nuclear projects in

the US over the past decade, we think final investment decisions (FIDs) are likely to

follow with bipartisan federal support amid broad state-level support and incentives

(see US Nuclear, 23 April 2026). We also view Korea nuclear supply chain names as

key beneficiaries of potential US-Korea nuclear co-operation.

Nuclear thesis intact, but earnings will differ: We remain constructive on nuclear,

but the magnitude of revenue and earnings recognition will vary significantly across

our coverage, depending on different partnerships and work scope. For Korea

projects, the E&C companies bid to participate and the works are divided among two

to three companies.