[Click e-Stock] "Data Center Orders Expected... GS Engineering & Construction Target Price Raised to 52,000 Won"

Hana Securities raised its target price for GS Engineering & Construction from 45,000 won to 52,000 won, citing expectations of a revenue surge driven by orders for artificial intelligence (AI) data centers.

According to Hana Securities on July 1, the new target price for GS Engineering & Construction is based on applying a target P/E ratio of 20 times the estimated earnings per share (EPS) for 2026. Considering the previous day's closing price of 25,100 won, the company sees more than double the potential for further gains.

Seungjun Kim, a research analyst at Hana Securities who authored the report, noted that among the government's three major megaprojects, GS Group has announced investments related to AI data centers. He highlighted that group affiliates such as GS Engineering & Construction and Xai C&A (a subsidiary of GS Engineering & Construction) have prior experience with data centers, thus increasing the likelihood that affiliates will secure new contracts.

Currently, GS Engineering & Construction and its consolidated subsidiary Xai C&A are undertaking three data center projects in Goyang, Paju, and Sejong. The company also plans to launch two additional projects in Ilsan and Busan within this year. Kim stated, "A total of 120MW is scheduled for the second half of this year, with expected orders approaching 1 trillion won. If an AI data center project in Donghae is launched afterward, orders could reach 1.2GW and exceed 10 trillion won."

In particular, Kim emphasized that GS Engineering & Construction, which has steadily built a solid track record in data centers, is now expanding into areas where it directly invests equity to develop and operate such facilities.

He added, "Orders exceeding 10 trillion won could contribute to revenue within two to three years, meaning the company's overall revenue growth could accelerate rapidly. If this coincides with an upturn in the construction cycle, the current stock price level would appear extremely undervalued. We maintain a strong buy recommendation, given the high expectations for domestic AI data centers."

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