"Building One of Asia's Largest Data Centers"... The Top Construction Stock Pick [Click eJongmok]

Shinhan Securities has raised its target price for GS Engineering & Construction from 37,000 won to 46,000 won. The investment opinion remains at 'Buy'.

On July 14, Sunmi Kim, a research analyst at Shinhan Securities, stated, “GS Group’s decision to invest in artificial intelligence (AI) data centers is creating strong momentum.” She added, “Given the operational targets for the data center, orders and construction are highly likely to begin within this year, and from next year, earnings are expected to rise significantly.”

This year’s performance is expected to show a pattern of being lower in the first half and higher in the second half. Analyst Kim explained, “Although housing sales in the second half of this year will inevitably decrease compared to last year, overall profitability will improve. This is mainly due to the supply of 11,000 new units in the first half, the resumption of new housing sales by Xi S&D, and the increase in the start of construction for the Xi C&A data center.”

The ‘Donghae AI Data Center’ was cited as a performance variable for the second half of this year and beyond. Kim noted, “Given the timing and scale of orders for the Donghae AI Data Center and its operational targets, the project must commence by the end of this year. Profitability is expected to be higher than that of typical plant projects, as the construction period is shorter, allowing for short-term contributions to results.”

She continued, “GS Engineering & Construction will prepare to handle as much volume as possible within a manageable risk level. If the Donghae data center project is further specified in the third quarter of this year, earnings are projected to increase.”

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