GS Construction, New Business Division Emerges... "Positive for Stock Price"

[Asia Economy Reporter Oh Ju-yeon] SK Securities predicted that GS Construction's sales in new business sectors this year could exceed 850 billion KRW. They also anticipated that if these expectations are proven, the stock price could be re-evaluated.

According to the Financial Supervisory Service's electronic disclosure system on the 24th, GS Construction recorded sales of 2.441 trillion KRW, operating profit of 171 billion KRW, pre-tax profit of 185 billion KRW, and new orders of 2.269 trillion KRW in the first quarter of this year.

Shin Seo-jeong, a researcher at SK Securities, analyzed, "The gross profit margin (GPM) in the overseas sector was 2%, as the existing projects were completed, leading to a significant decrease in GPM, while the housing sector's margin rose to 19.5% due to the completion effects of some projects." Regarding housing sales, the sector attracting the most market interest, 2,033 units were recorded in Q1, with 13,000 units expected in Q2, and over 26,000 units projected for the year.

Researcher Shin also expressed optimism about GS Construction's new business sector going forward.

Shin stated, "Sales in the new business sector are expected to exceed 850 billion KRW this year, with Inima contributing 380 billion KRW and the module sector expected to achieve similar sales levels." He added, "Through G-BESCO, we plan to steadily discover businesses in real estate development, infrastructure SOC projects, and environmental sectors, which are expected to create synergy effects with GS Construction's divisions."

He concluded, "For the new business sector, which has become visible through this earnings announcement, if future performance is proven, we can expect re-rating in all aspects including growth potential, sustainability, and visibility," recommending a 'Buy' rating with a target stock price of 37,000 KRW.

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