"Daewoo E&C Expected to Rebound in Earnings... Investment Rating Upgraded" [Click e-Stock]

Mirae Asset Upgrades Daewoo E&C Investment Rating to 'Buy'
Target Price Revised Downward

Mirae Asset Securities on July 13 raised its investment rating on Daewoo Engineering & Construction from Neutral to Buy, while lowering its target price from 35,000 won to 24,000 won.

Kim Giryong, Research Analyst at Mirae Asset Securities, stated recently, "Although we are lowering the target price, we are upgrading our rating to Buy given the upside potential." According to Kim, investor expectations for overseas nuclear power and liquefied natural gas (LNG), which drove the stock’s strength earlier this year, have weakened due to a lack of concrete results and increased market volatility, leading to a sharp decline in Daewoo E&C’s share price.

Kim explained that although the coordination process with Korea Hydro & Nuclear Power regarding the Dukovany nuclear power plant project in the Czech Republic has been prolonged, resulting in delays to the construction contract, both the design and procurement contracts have been signed, so the construction contract remains valid. He added, "Greater visibility and performance in key projects such as the Czech project, the Ninh Thuan 2 project in Vietnam, and U.S. nuclear power plants will serve as meaningful triggers for a rebound in the share price."

The company is also expected to beat market expectations in its second quarter results this year. Kim forecast sales of 2.03 trillion won and operating profit of 168.4 billion won. While sales are projected to decrease by 10.5% year-on-year, operating profit is expected to rise by 104.9%.

In particular, the housing and plant divisions are expected to rebound again in the second half of the year. In the housing division, results from self-development housing projects with completed sales amounting to 3 trillion won and improved business mix effects are expected to be reflected more fully. In the plant division, earnings from the Turkmenistan fertilizer and Mozambique LNG projects, which will replace Nigeria, are anticipated to gradually increase.

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