Daewoo Construction, Simultaneous Expansion of Scale and Improvement in Profit Margin

[Asia Economy Reporter Park Jihwan] SK Securities on the 23rd gave a Buy rating and a target price of 5,000 KRW for Daewoo Construction, stating that the company achieved both top-line growth and profit margin improvement simultaneously.

Shin Seo-jeong, a researcher at SK Securities, analyzed, "Daewoo Construction's 1Q sales amounted to 1.9858 trillion KRW, a 2.21% decrease year-on-year, but operating profit increased by 22.7% to 120.9 billion KRW."

By segment, attention was drawn to the growth in the civil engineering and plant sectors. For housing, it is expected that significant sales growth will occur after the second half of the year.

Profit margin improvement is also notable. The GPM in the civil engineering and plant sectors recorded 7.25% and 8.15%, respectively, showing stabilization compared to the negative profit margins in the fourth quarter of last year.

In terms of orders, 1Q recorded 1.5037 trillion KRW, achieving 12% of the annual guidance of 12.8 trillion KRW.

Researcher Shin Seo-jeong explained, "For the housing sector, sales growth is expected from the second half of this year, and the sales growth trend is likely to accelerate from next year."

In the first quarter of this year, 2,678 units were sold, all of which were urban redevelopment units, with the majority located in the metropolitan area. Although this is somewhat delayed compared to the initial target of 6,000 units, 17,000 units are scheduled for the second quarter and 13,000 units for the third quarter.

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