[Click eStock] "GS Geonseol, New Orders Favorable Contrary to Concerns"

DB Financial Investment Issues 'Buy' Rating and Sets Target Price at 35,000 Won... Closing Price on 29th Last Month Was 25,300 Won

Perspective view of GS Construction's Shindongtan Foret Zai (Photo by Asia Economy DB)

[Asia Economy Reporter Kum Boryeong] Contrary to concerns, GS Engineering & Construction's new housing orders are analyzed to be favorable.

According to DB Financial Investment on the 4th, GS Engineering & Construction's first-quarter performance was confirmed with sales of 2.4415 trillion KRW and operating profit of 171 billion KRW. Compared to the previous year, sales decreased by 6.2% and operating profit by 10.6%. Sales fell short of consensus due to not only a lower-than-expected construction progress rate but also the sales contribution of consolidated subsidiaries (Inima Brazil, European module companies, JS&D) falling short of expectations.

New housing orders were normal. DB Financial Investment analyst Cho Yoonho explained, "GS Engineering & Construction's first-quarter new orders amounted to 2.2687 trillion KRW, a 64.9% increase compared to the same period last year. Contrary to concerns, new orders were favorable, especially housing new orders which increased by 83.8% compared to the same period last year," adding, "While quarterly new orders should not be overemphasized, this shows that the impact of COVID-19 on domestic orders was limited."

DB Financial Investment gave GS Engineering & Construction a 'Buy' investment rating with a target price of 35,000 KRW. The closing price on the 29th of last month was 25,300 KRW. Analyst Cho said, "Unlike during past financial crises, the construction sector has demonstrated earnings stability in this first quarter, and new order performance is relatively favorable. Major sales projects that were somewhat delayed in the first quarter are expected to resume from the second quarter," adding, "Moreover, despite unstable market conditions, the fact that many construction companies including GS Engineering & Construction are considering investments proves the improved financial structure of the construction sector. It is judged to be reasonable to focus on the domestic construction market rather than overseas, and we recommend GS Engineering & Construction, which has high valuation appeal, as the top preferred stock in the sector."

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