[Click eStock] "GS Geonseol, Q1 Performance Stable... Time to Focus on Recovery from Decline"

[Asia Economy Reporter Park Jihwan] KB Securities maintained a buy rating on GS Construction on the 30th, stating that due to the nature of the order-based industry, the impact of COVID-19 and the decline in oil prices on performance is not significant. However, the target price was lowered by 28.6% from the previous level to 27,500 KRW.

Jang Moonjun, a researcher at KB Securities, said, "Due to the nature of the order-based industry, the impact of COVID-19 and the decline in oil prices on performance is not significant," adding, "On a consolidated basis for the first quarter, sales are expected to decrease by 2% year-on-year to 2.55 trillion KRW, and operating profit is expected to decline by 1.4% to 188.8 billion KRW, both meeting market expectations."

Despite the decrease in sales, the cost ratio is expected to rise compared to the same period last year, but a stable operating profit is anticipated due to a decrease in selling and administrative expenses compared to the same period last year.

However, considering unfavorable real estate policies and the sharp drop in oil prices, it is analyzed that it will be difficult to expect a sharp rebound in the stock price in the near term.

Researcher Jang Moonjun pointed out, "Considering the profit margin in the housing sector, the reduction in the scope of housing business guarantees, and the decrease in overseas bad debts, even if macroeconomic uncertainties prolong, the possibility of financial structure deterioration as seen in the past is low."

He also advised, "At the current stock price level of 0.3 times the 12-month forward BPS, it is necessary to focus on recovery from the decline rather than expecting further drops."

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