KEPCO Engineering & Construction Company

KEPCO E&C has been the dedicated designer of Korea's nuclear power plants since joining the KEPCO group in 1982, operating as a specialist power-plant engineering firm.

It is the only Korean design house holding both nuclear plant A/E and NSSS design capabilities, with KEPCO and its generation subsidiaries as core clients, and it joins overseas nuclear bids as part of Team Korea alongside Korea Hydro & Nuclear Power.

The business splits into three pillars: nuclear (A/E and O&M), reactor design and development (NSSS), and new energy (thermal, renewables, overseas EPC).

In a May 2026 report, LS Securities put 2025 segment revenue at KRW 347.0bn for nuclear, KRW 94.0bn for reactor design and KRW 77.8bn for new energy, leaving nuclear-related work as the overwhelming majority.

Beyond new-build design, the company covers maintenance of operating plants and decommissioning across the full plant lifecycle, leads a government SMR development project, and is developing its own marine small reactor known as BANDI.

Because clients are mostly state-owned entities, collection risk is low, but revenue recognition is tied to government policy and order timing.

Labor costs account for 40-50% of costs, a fixed-cost structure that delivers strong operating leverage when two or more large nuclear projects run in parallel, but erodes margins quickly when progress rates slip.

In renewables, building on the completed Jeju Hallim offshore wind project, it is working on Aphae (88MW) and Wando Geumil, where its EPC consortium with Hyundai E&C and HD Hyundai Heavy Industries was named preferred bidder, and it has signed a joint development agreement for nearshore wind in Vietnam.

Competitively, there is no direct domestic substitute designer, while overseas the company both competes and cooperates with a small group of designers such as Westinghouse.

Consolidated 2025 revenue came in at KRW 518.8bn, down from KRW 553.4bn in 2024, while operating profit fell from KRW 54.8bn to KRW 35.5bn, pushing the operating margin from 9.9% to 6.8%.

In a February 2026 report, LS Securities attributed the weakness to progress delays at Shin-Hanul 3&4 A/E work, Wolsong 3&4 O&M and the Romania CTRF project, lower NSSS workload at Saeul 3&4, and shrinking new-energy revenue as the Jeju Hallim offshore wind and Indonesia gas-engine plant projects wound down.

Net profit attributable to owners, by contrast, jumped to KRW 85.4bn from KRW 58.5bn in 2024, and LS Securities pointed to a roughly KRW 79bn gain on the disposal of the old headquarters in Q1 2025 as the driver of the pre-tax profit surge, indicating a large one-off, non-operating contribution.

That left 2025 with the unusual gap of falling operating profit alongside rising net profit, while operating cash flow slipped from KRW 49.0bn to KRW 29.3bn.

Over multiple years, revenue has hovered in a narrow band of KRW 505.3bn (2022), KRW 545.1bn (2023), KRW 553.4bn (2024) and KRW 518.8bn (2025), whereas operating profit swung far more widely at KRW 13.9bn, KRW 28.6bn, KRW 54.8bn and KRW 35.5bn.

Quarterly data make the volatility even clearer: Q2 2025 posted revenue of KRW 102.3bn with an operating loss of KRW 4.4bn, followed by KRW 12.3bn of operating profit in Q3 and a year-end concentration in Q4 with revenue of KRW 205.5bn and operating profit of KRW 26.4bn.

Kiwoom Securities, in a February 2026 report, explained the Q4 miss versus consensus through a change in how R&D project revenue is recognized, seasonal one-off costs such as bonuses, and extra design manpower deployed to lift progress rates.

In 2026, Q1 recovered to revenue of KRW 113.3bn and operating profit of KRW 14.1bn (12.4% margin), but Q2 delivered only KRW 103.3bn and KRW 3.0bn, so most of the KRW 17.1bn first-half operating profit was booked in the first quarter.

On the balance sheet, the debt-to-equity ratio fell from 64.0% in 2024 to 41.7% in 2025 and equity rose to KRW 625.0bn, leaving the financial capacity to run several large projects in parallel.

The global nuclear cycle is widely described as entering its broadest expansion in decades, driven by AI data-center power demand converging with energy-security debates.

The United States designated nuclear as a core energy strategy in 2025 and set out plans to expand nuclear capacity from roughly 100GW today to 400GW by 2050, including ten new reactors. Domestic policy support has also continued.

Korea's finance ministry has been preparing a 2026 economic growth strategy that would newly designate silicon carbide power semiconductors and SMRs as national strategic technologies.

Barriers to entry in design work are extremely high, so KEPCO E&C enjoys a near-monopoly at home while remaining fully exposed to the ordering cycle.

In a February 2026 analysis, NH Investment & Securities estimated Westinghouse's large-reactor design workforce at 4,000-5,000 people, limited capacity for running many US and European projects at once, and noted that KEPCO E&C has handled up to eight units with roughly 2,000 design engineers.

In cycle terms, order intake has already turned up, but revenue is recognized gradually starting from pre-construction design work, so the lag between awards and reported earnings is unusually long in this industry.

Within the value chain, Doosan Enerbility supplies main equipment, KEPCO KPS handles maintenance and builders such as Daewoo E&C and Hyundai E&C handle construction, while KEPCO E&C sits upstream in design and therefore books revenue earlier in a project's life.

Offshore wind, however, still carries unresolved economics around REC pricing and financing, presenting a different kind of delay risk from nuclear.

The clearest revenue anchor is the Czech project. Combining the A/E contract with KHNP and the NSSS design contract with Doosan Enerbility (KRW 373.4bn, signed 24 December 2025), total Dukovany 5&6 related contract value stands at KRW 1,624.3bn, with a contract term running to April 2038.

Kiwoom Securities, in a February 2026 report, estimated 2025 revenue from the Czech large-reactor project at roughly KRW 25bn and projected expansion to about KRW 100bn in 2026. Domestically, brokerages broadly agree that Shin-Hanul 3&4 has entered the phase of heavier revenue recognition.

On new orders, Samsung Securities said in a May 2026 report that the two large reactors and one SMR planned under the 11th Basic Plan for Electricity Supply should be ordered no later than next year, and that based on Saeul 3&4 and Shin-Hanul 3&4 precedents, awards equivalent to 6-8% of total project cost can be expected.

On the non-nuclear side, Mirae Asset Securities estimated in May 2026 that converting the 600MW Wando Geumil offshore wind pre-commencement scope won in February 2026 into a main contract could yield roughly KRW 1tn of new orders, and the disclosure states that the pre-commencement contract may terminate early if an EPC contract is signed before 31 December 2026 or if the project is halted or cancelled, so the outcome should become visible before year-end.

A consortium including KEPCO E&C was also selected as preferred bidder for an 800MW offshore wind project in southwestern Jeonbuk and has been pursuing an implementation agreement with the provincial government. SMR sits on a longer timeline.

The innovative SMR development program runs from May 2024 to December 2027 with total technology fee revenue of KRW 400bn, of which the company's design portion is around KRW 100bn, and it targets standard design approval in 2028 and a construction permit in 2030.