Bright prospects for wind energy stocks

With soaring oil prices and growing public awareness of environment issues, wind energy stocks are enjoying continued investor interest.

Experts say that stocks in wind turbine part manufactures, power plant builders and engineering companies are likely to see upward momentum as both the local and overseas markets are expected to grow significantly in the coming years.

"Korea`s wind energy industry is still at an early stage but it boasts ample growth potential with a bright outlook on global and domestic markets," said Kim Kyeong-sup, an analyst at Goodmorning Shinhan Securities Co.

He added that domestic manufacturers of wind turbine power plants, in particular, are expected to see business improving in the coming years, driven by the global demand for their products. They include manufacturers such as Taewoong Co., PSM Inc., Hyunjin Materials Co., and Dongkuk S&C. which are supplying parts to global wind power companies such as Vestas and GE Wind.

According to the Global Wind Energy Outlook 2005, wind energy supply will increase by 17.9 percent annually until 2010. Then, the global wind energy industry will be worth over $34 billion.

Constructors of wind turbine plants can also expect a brisk business as the Korean government plans to add more wind turbine power plants. Korea aims to increase energy derived from renewable sources to 5 percent of its total power generation by 2011.

In the long-term, Korean companies trying to produce home-made power generating systems and facilities also have a bright future, experts say.

"The wind power industry shows the fastest pace of growth among alternative energy industries. Stocks of KR Co., in particular, could rise further as the company is landing big-scale contracts overseas," Kim Hee-sung of Hanyang Securities Co.

Unison, STX Engine, Hyosung are also expected to see their bottom line improve as they are building or are soon to start building, wind turbine power plants across the country.

Doosan Heavy Industries and Construction Co. is also drawing investor interest after it announced a plan to enter the wind power industry.

(milaya@heraldm.com)



By Lee Sun-young