GS Engineering & Construction Equipped with Housing, Data Centers, and Nuclear Power, Target Price Raised [Click e-Stock]

Daishin Securities Raises GS Engineering & Construction Target Price
from 36,000 Won to 44,000 Won

On August 19, Daishin Securities maintained its "Buy" investment opinion on GS Engineering & Construction and raised its target price from 36,000 won to 44,000 won.

Hyejin Lee, an analyst at Daishin Securities, stated, "The current earnings estimates do not yet reflect the orders and results related to the Donghae artificial intelligence (AI) data center. As the business becomes more concrete and initial contracts materialize, there is potential for upward revision of profit forecasts and a revaluation of valuation." She added, "We present it as the second-preferred stock within the construction sector."

The analyst evaluated that GS Engineering & Construction possesses all the key investment points in the sector, including housing profitability, data centers, and nuclear power plants. In the housing sector, cost burdens are being alleviated, and sales recovery is anticipated. High-cost sites have been depleted, and as revenue from high-margin sites starts to be recognized in earnest, profitability is expected to continue improving. She said, "With the normalization of the cost rate, we forecast the gross profit margin for the housing business in the second half to be around 12–15%. The cumulative pre-sales in the first half amounted to 10,950 units, already exceeding the annual target of 14,320 units. We believe that as pre-sale volume increases, housing revenue will hit a bottom in 2026 and enter a full recovery phase starting in 2027."

Data centers are emerging as a new growth engine. The analyst noted that GS Engineering & Construction, including Xi C&A, has references for a total of 20 data center projects amounting to 700 MW, which is the highest level in Korea. She added that the GS Group currently has a pipeline of four projects totaling 2,530 MW, including the Donghae AIDC. "Data centers have a short construction period of two to three years, so revenue is generated quickly after orders are received. Based on the accumulated references of GS Engineering & Construction and Xi C&A, the company has secured the capability to undertake large-scale AI data center projects," she emphasized.

GS Engineering & Construction has participated as a non-leading contractor in the Shin Hanul Units 1 and 2 and Shin Wolsong Units 1 and 2, and is currently expanding its nuclear power plant references by joining the new export research reactor business and next-generation large nuclear power plant projects. The analyst said, "The company is reviewing participation opportunities in new overseas nuclear power plant projects, such as the Ninh Thuan nuclear power plant in Vietnam, and expects additional order momentum as the overseas nuclear power market expands in the medium to long term."

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