[Click e-Stock] "DL E&C Anticipates AI Infrastructure Orders... Target Price Raised"

Hana Securities Raises Target Price for DL E&C to 100,000 Won

On September 15, Hana Securities raised its target price for DL E&C from 80,000 won to 100,000 won, reflecting growing expectations for orders related to artificial intelligence (AI) infrastructure. The company maintained its 'Buy' investment rating.

Hana Securities stated, "We have raised the company's valuation by reflecting expectations for data center orders anticipated in the second half of the year and next year, as well as the possibility of winning the design, procurement, and construction (EPC) contract for the first U.S. investment project, a combined cycle power plant."

During its second-quarter earnings announcement, DL E&C set a target of winning three data center contracts in the second half of the year, amounting to a total value of 2 trillion won. Recently, the company was selected as the builder for Area A (100MW) of a 300MW AI data center currently under development at Songsan 2 General Industrial Complex in Dangjin, Chungnam. DL E&C is currently carrying out pre-construction processes and is scheduled to begin full-scale construction in early November.

Hana Securities added, "Approximately 1 trillion won in orders are expected in the fourth quarter, and the pace of revenue generation is likely to be rapid, with the goal to commence services in the first quarter of 2028. There is also the potential to win connected contracts for Area B (100MW) and Area C (100MW)." The firm further stated, "We anticipate data center orders of 2 trillion won in the second half of the year and another 2 trillion won in 2027. Given the rapid recognition of data center revenues, there is room to revise earnings estimates upward."

DL E&C is currently working on the Gimpo Data Center project (worth 444.5 billion won) and the Bupyeong Data Center project (worth 213.4 billion won), while DL Construction is engaged in the Bucheon Peach Data Center (211 billion won) and the Bucheon Samjeong Data Center (126.8 billion won).

Previously, the company secured and is progressing with contracts for the Bundang Combined Cycle Power Plant, Yeongdong Pumped-Storage Power Plant, and the GS Bucheon Cogeneration Plant. This year, it has secured orders for the East Jeju Combined Cycle Power Plant and the Asan Cogeneration Plant. Hana Securities commented, "Based on this track record, expectations are rising for winning the first U.S. investment project, the Texas Encinal Combined Cycle Power Plant construction, which is soon to be announced."

The possibility of collaboration with DL Energy, an affiliate of DL E&C, was also rated positively. DL Energy has a history of equity investment in combined cycle power plants such as CPV Fairview and Niles in the U.S., and the Niles project was developed jointly with Korea South-East Power. Additionally, the Texas Encinal Combined Cycle Power Plant is planned to construct 1.4GW of gas generation capacity in the first phase, followed by a sequential expansion of 4.9GW of combined cycle capacity for a total of 6.3GW.

Hana Securities noted, "The total project size is 22.3 billion dollars, and it is expected to be approved as the first U.S. investment project. Major construction companies that have recently won domestic combined cycle power plant projects based on their references include Hyundai Engineering, DL E&C, Daewoo Engineering & Construction, Kumho E&C, and HJ Shipbuilding & Construction, while major companies winning overseas power plant projects include Doosan Enerbility, Samsung C&T, and Hyundai E&C," the company added.

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