[Click eStock] "Doosan Infracore, Remarkable Profitability Defense Capability"

[Asia Economy Reporter Eunmo Koo] Doosan Infracore recorded an operating profit margin that exceeded market expectations in the first quarter of this year despite the global excavator market downturn. It is analyzed that the recovery in excavator sales flow in China since last month will continue into the second quarter, enabling differentiated profitability.

According to DB Financial Investment on the 4th, Doosan Infracore posted sales of 2.0093 trillion KRW in the first quarter, down 7.9% year-on-year, with an operating profit margin of 9.0%. Kim Hong-gyun, a researcher at DB Financial Investment, explained in a report on the day, “Although sales in the Chinese market decreased in the first quarter due to the impact of COVID-19, the decline in sales was mitigated by increasing market share in advanced and emerging markets,” adding, “The engine business led performance improvement due to the realization of sales from external G2 engine supply contracts and the absence of one-time costs.” Additionally, the subsidiary Bobcat saw a slight decrease in sales due to the global demand slowdown, and operating profit also declined due to increased costs from new product launches.

It is analyzed that the recovery in excavator sales flow in China since March will continue into the second quarter, enabling differentiated profitability. Doosan Infracore shows strong sales competitiveness and solid profitability in the Chinese excavator market. Researcher Kim said, “There were concerns about rising promotion costs due to intensified competition in excavator sales in China, but it has been identified that local companies are currently pushing for price increases, which is expected to have a positive effect on Doosan Infracore’s profitability,” adding, “Although excavator sales in advanced markets such as North America and Europe are expected to decline in the second quarter as COVID-19 spreads actively from last month, it is judged that this can be partially offset by the Chinese and domestic markets.”

With strengthened fundamentals, solid profitability is expected to be maintained in the second quarter as well. Researcher Kim advised, “The Chinese excavator market, which has a significant impact on Doosan Infracore’s stock price, is likely to create a favorable atmosphere this year,” and recommended, “For now, it is advisable to approach while confirming China’s economic stimulus efforts.”

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