[Click eStock] "Jaes&D, Housing Development Sales to Accelerate in Second Half"

Unstarted Construction Order Backlog Reaches 1 Trillion Won

[Asia Economy Reporter Minji Lee] DB Financial Investment maintained a buy rating and a target price of 8,000 KRW for Jaes & D on the 21st, based on the judgment that housing development sales will begin in earnest in the second half of the year.

As of the end of the first quarter, out of the order backlog (including secured volumes at 22 sites), only 4 sites have started construction. The secured order backlog amounts to 1.1 trillion KRW, with unstarted backlog at about 1 trillion KRW.

Considering that most sites are scheduled to begin construction by 2022 at the latest, housing development sales, which recorded 20.3 billion KRW last year, are bound to increase. The construction progress rate of the 4 sites generating sales is only 20.86%, so construction speed is expected to accelerate after the second quarter.

Yoonho Cho, a researcher at DB Financial Investment, said, “Considering the increase in progress recognition at sites where construction has started and the fact that 6 sites are scheduled to begin construction within the year, a full-fledged growth trend will be seen from the second half of the year,” adding, “The order backlog secured so far is the clearest evidence of Jaes & D’s growth potential.”

The SK Networks gas station sale site project is expected to be carried out as a development project in which Jaes & D directly purchases the land. A total of 5 sites are planned to be purchased, with payment scheduled for June 1 this year to transfer ownership. Four sites will be developed as youth rental housing projects, and one site will be developed as a knowledge industry center.

Researcher Cho said, “Although the development form has not been finalized, construction is expected to start as early as June 2021,” adding, “The order amount is expected to be around 120 billion to 130 billion KRW.”

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