"Doosan Strengthens Core Earnings Base with SK Siltron Acquisition... Target Price Raised" [Click e-Stock]

Eugene Investment & Securities Raises Doosan Target Price
From 2.58 Million Won to 2.68 Million Won

Eugene Investment & Securities maintained its "Buy" rating on Doosan on August 4 and raised its target price from 2.58 million won to 2.68 million won.

Lee Juhyung, an analyst at Eugene Investment & Securities, stated, "We have revised our earnings estimates upward, based on the scenario that SK Siltron's results will be reflected in Doosan's standalone business from the second quarter of next year."

Lee assessed that the additional funding burden associated with this acquisition is very limited. Doosan recently announced that it had signed a share purchase agreement to acquire SK's 70.6% stake in SK Siltron for 2.3 trillion won. He noted that Doosan's standalone cash assets as of the second quarter this year amount to 1.68 trillion won, with a remaining loan limit of 400 billion won. By utilizing 2.5 trillion won of acquisition finance arranged by Korea Development Bank, the company is expected to secure 1 trillion won for additional acquisition funding and 1.5 trillion won to repay SK Siltron's borrowings. He added, "Despite the large-scale M&A, we believe the likelihood of existing shareholder value being diluted through a rights offering or similar action is very low."

He evaluated that Doosan acquired SK Siltron at an attractive price when compared with global peer companies' EV/EBITDA multiples. For example, while the 2027 expected average EV/EBITDA for peers such as Siltronic is around 12.6 times, if Doosan were to acquire the remaining 29.4% stake from Chairman Chey Tae-won at the same valuation as this transaction, the acquisition valuation would be just 8 times. Lee commented, "Given that global peer share prices have risen 122% on average since the beginning of the year, this can be seen as a 'Good Deal' acquired at a highly attractive price, without an upward adjustment of the purchase price that the market had initially feared."

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