[Click eStock] "CS Wind, Share Price Discount Excessive... Bottom-Fishing Strategy Remains Valid"

Entering a Phase of Excessive Undervaluation

Oligopolistic Structure Solidified in the US and Europe

Securing Medium- to Long-Term Growth Drivers

According to securities industry analysis, the recent decline in the share price of CS Wind, the largest wind tower manufacturer in Korea, is considered excessive, making this a time to pay attention to its potential for a rebound.

On June 23, Eugene Investment & Securities analyst Byunghwa Han stated that, as of the previous day, CS Wind’s price-to-earnings ratio (PER) is trading at a 58% discount and its price-to-book ratio (PBR) at a 73% discount compared to overseas wind power companies. The analyst maintained a "BUY" recommendation and a target price of 80,000 won.

Firm Global Position... Oligopolistic Structure in Wind Tower Market Solidified

Analyst Han explained that the recent drop in CS Wind’s share price to the 40,000 won range is not due to short-term earnings or industry conditions, but is rather triggered by FOMO (fear of missing out) towards semiconductors. He pointed out, "Considering that the valuation discount compared to global peers has expanded to an all-time high, the downside risk at current levels is limited."

He especially focused on the oligopolistic nature of the wind tower business. In both the US and Europe, the wind tower manufacturing sector is shifting to a structure dominated by just two or three companies per continent. Chinese tower manufacturers are mostly confined to their domestic and some emerging markets, while their entry into US and European markets is restricted by various barriers. Small and medium-sized players are struggling to cope with raw material supply instability, inflation, and policy volatility, and are thus exiting the business.

Han noted, "Recently, Broad Wind, the third largest US company, announced its withdrawal from the wind tower manufacturing business," and emphasized, "Excluding China, the medium- to long-term business position of CS Wind, the global number one, is becoming even stronger."

Solid Performance Expected Through Next Year... Q2 Operating Profit Forecast to Rise 32%

CS Wind’s sales in the second quarter of this year are estimated at 736 billion won, with operating profit expected at 78 billion won, representing year-on-year increases of 13% and 32%, respectively. The company is also expected to maintain solid annual results this year and next. In addition, increases in US onshore tower installations and the expansion of offshore wind tower demand in Europe are projected to keep annual sales at around 3 trillion won and operating profit at about 300 billion won.

Han added, "From 2028, there is a possibility that reductions in US subsidies could lead to declines in both scale and profit. However, if the Democratic Party regains the House in the midterm elections, the likelihood of reinstating onshore wind subsidies will increase, while if the opposition secures budgetary control, even the Trump administration would be forced to compromise to some extent." He judged that CS Wind will continue efforts to diversify its business and secure new growth bases in preparation for these scenarios.

Accordingly, the company’s valuation appeal is expected to stand out even more. Even by PBR standards, CS Wind trades at just 1.6 times, which is 73% lower than the peer average of 6.1 times. Han concluded, "For a leading equipment supplier like CS Wind, its growth story is not even at its halfway point," adding that the company’s long-term growth momentum remains intact.

This content was produced with the assistance of AI translation services.