[Click e-Stock] Xi S&D Gains Additional Momentum from Data Centers... Target Price Raised

Performance Growth in Housing and Architecture Sectors
with Additional Momentum from Data Centers Expected

On August 27, Hanwha Investment & Securities maintained its 'Buy' investment rating on Xi S&D, stating that, in addition to the existing performance growth in the architecture and housing sectors, data centers are emerging as a new growth driver. The target price was also raised from 10,000 won to 14,000 won.

Yurim Song, a researcher at Hanwha Investment & Securities, commented, “Xi S&D’s second-quarter revenue came in at 303.3 billion won, and operating profit at 9 billion won, down 10.0% compared to the same period last year, but the company returned to profitability. Based on pre-sold and commenced projects, full-fledged sales growth is expected from the second half, while the recovery of housing cost ratios has been confirmed, suggesting that profit improvement will be very pronounced.”

Song stated, “In the housing division, in addition to starting construction on four sites totaling 700 billion won in the first half, the company plans to begin work on four to five additional sites in the second half. For the following year and the year after, Xi S&D plans to break ground at 12 and 9 sites respectively, so strong earnings growth is expected over the next three to four years.”

Furthermore, she evaluated, “The architecture division, Xi C&A, has set medium- and long-term revenue targets of 1.5 trillion won in 2028 and 2.3 trillion won in 2031. The key strategy is to expand external (non-captive) projects, such as data centers and industrial plants.”

She added, “The potential order for the Donghae AI Data Center (DC) represents a new growth driver. The company has top-tier domestic references, including experience in building nine data center projects of over 20 megawatts (MW) each, and is expected to participate in the construction of the Donghae project in collaboration with GS Engineering & Construction in the second half.”

Song further analyzed, “In the context of differentiated performance growth within the industry, if the data center orders are secured, there is considerable upside potential for performance estimates. Despite the recent surge in share price, the current valuation remains undemanding at a 12-month forward price-earnings ratio (P/E) of 5.1 times.”

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