Korea nuclear update: Polish nuclear project proceeds; eyeing on the SMR catalysts from US/Europe

Korean nuclear stocks have underperformed the KOSPI over the past month (KEPCO -7%, Doosan Enerbility -23%, Hyundai E&C -25%, KEPCO E&C -25% vs KOSPI -16%) as large-scale nuclear upside appears increasingly priced in following the early-October confirmation of at least eight US reactors under the Korea-US framework and the reversal of the sharp mid-September rally. We believe incremental catalysts for Korean companies are now more likely to come from SMRs. Globally, nuclear momentum continues to build, with TVA receiving a landmark BWRX-300 construction permit, Palisades advancing its SMR-300 application, and Poland progressing long-lead procurement for its first AP1000 unit, while Hyundai E&C expanded into the Netherlands' AP1000 FEED and emerged as a candidate for TerraPower's Natrium EPC rebid. We remain constructive on Korean nuclear EPC names, with Doosan Enerbility our top pick. We downgrade KEPCO E&C to Neutral as incremental APR1400 rerating momentum has largely played out, and