Doosan Škoda Power: high steam pressure needs to cool off (downgraded to SELL)
We have downgraded Doosan Škoda Power (DSP) from Buy to SELL, and set our new 12M price target (PT) at CZK 437/share (8% downside). Since its February IPO, the stock has rallied 98%, and is now trading at 23.4-19.8x P/Es and 14.5-12.3x EV/EBITDAs for 2025-26E (a 17% discount vs. its global turbine peers and a 43% premium vs. its CEE peers on the 2025E EV/EBITDA). We see these multiples as demanding, given the backlog contraction in 1H25, signalling a weaker order intake than revenue recognition, implying a book-to-bill of 0.6x. While the new CZK 5bn Temelín generators replacement contract (2029-30E delivery) should support the backlog in 3Q25E, we estimate that, excluding Temelín, the 3Q25E order intake might be only CZK 0.9bn as of 26 September, based on management’s statements, implying a sub-1.0x book-to-bill for 3Q25E. We expect the bulk of the revenues from Temelín to be recognised in 2029-30E, providing limited near-term earnings support. While DSP is negotiating additional projects currently (might be signed in 4Q25E), our 2026-27E estimates are broadly unchanged. Given that investors have likely priced in the Temelín project fully, we see the mid-term earnings risks as skewed to the downside. A positive catalyst for the investment case would be higher-than-expected backlog growth.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.