DS Investment Securities downgraded its target price for Doosan Fuel Cell stocks from 56,000 won to 47,000 won on July 27, citing delays in overseas order inflows beyond initial expectations while maintaining a 'Buy' rating. Analyst Ahn Joo-won attributed the revision to slower-than-anticipated international contract closures and noted that securing overseas orders this year is critical as South Korea's government reduces domestic fuel cell tender volumes. The downgrade reflects current stock price declines amid a challenging domestic regulatory environment for the fuel cell sector.
Doosan Fuel Cell Reports Q2 Revenue Decline and Widened Operating Loss
Doosan Fuel Cell's provisional Q2 revenue reached 44.3 billion won, down 65.5% year-over-year. The company posted an operating loss of 50.9 billion won, expanding from a 1.3 billion won loss in the previous quarter. Ahn analyzed the quarterly results as driven by rising costs due to gaps in main equipment sales, 30 billion won in stack replacement expenses, and fixed cost burdens from SOFC facilities.
Stack Replacement Costs and SOFC Facility Expenses Drive Loss Expansion
The analyst identified three primary cost factors behind the widened loss: increased unit costs from main equipment revenue gaps, 30 billion won allocated to stack replacement, and ongoing SOFC plant fixed expenses. Stack replacement is scheduled to continue through this year, with costs expected to impact H2 results as well. The company targets raising SOFC factory yield from the current 80% to 90% by year-end.
Company Targets SOFC Yield Improvement and H2 Domestic Revenue Recovery
Ahn projected this year as the performance trough, anticipating loss reduction in H2 as 300 billion won in domestic main equipment revenue is recognized. Stack replacement expenses will persist through year-end. Doosan Fuel Cell aims to improve SOFC production yield from 80% to 90% by the close of the year.
Doosan Fuel Cell Finalizes Supply Terms with German Partner for 2026–2027
The company completed negotiations on key supply contract terms with a German firm for SOFC stack deliveries scheduled for 2026–2027. PAFC supply discussions for North American data center projects remain ongoing. Ahn stated that export unit prices exceed domestic levels and emphasized that establishing initial references naturally leads to follow-on orders. He highlighted severe power shortages in the U.S. data center industry and noted that fuel cell advantages continue to gain prominence, presenting opportunities for Doosan Fuel Cell. The analyst added that with only a handful of companies globally operating power generation fuel cell businesses including Doosan Fuel Cell, he expects stock recovery through H2 exports.
FAQ
Why did DS Investment Securities lower Doosan Fuel Cell's target price on July 27?
DS Investment Securities reduced the target price from 56,000 won to 47,000 won due to overseas order inflows occurring later than initially expected and to reflect the declined stock price, while the South Korean government is reducing domestic fuel cell tender volumes.
What caused Doosan Fuel Cell's operating loss to widen in Q2?
The Q2 operating loss of 50.9 billion won resulted from cost increases due to main equipment sales gaps, 30 billion won in stack replacement expenses, and SOFC facility fixed cost burdens, according to analyst Ahn Joo-won.
