[Click eStock] "Daewoo E&C's Q3 Operating Profit Meets Market Expectations"

[Asia Economy Reporter Oh Ju-yeon] Hanwha Investment & Securities expects Daewoo E&C's operating profit for the third quarter of this year to meet market expectations. Although the stock price has recently declined due to short-term supply and demand headwinds, it is a time when active buying is necessary, maintaining a 'Buy' investment rating and a target price of 4,200 won.

According to Hanwha Investment & Securities on the 7th, Daewoo E&C's sales for the third quarter of this year are expected to be 2 trillion won, a 3.3% decrease compared to the same period last year, and operating profit is forecasted at 107.5 billion won, down 9.6%. This is 1.6% lower than the market consensus operating profit of 109.3 billion won.

Despite sales growth in the housing construction and civil engineering sectors, the decrease in plant sales due to COVID-19 is prominent, limiting sales growth.

Researcher Song Yu-rim stated, "Although it is difficult to rule out the possibility of additional cost reflection at overseas sites in the third quarter, considering performance from next year onward, the third-quarter results are unlikely to have a significant negative impact on the stock price."

Furthermore, the housing sector's performance over the next three years is expected to be the most outstanding among large construction companies, with both sales growth and margin improvement.

Researcher Song diagnosed, "The company's pre-sale volume sharply increased from 14,000 units in 2018 to 21,000 units in 2019, and 35,000 units planned for 2020. With about 26,000 units pre-sold cumulatively by the third quarter of this year, the possibility of achieving the annual target has also increased."

She added, "From the second half of this year through next year, a total of seven self-developed projects worth approximately 3.7 trillion won are scheduled for pre-sale, so the housing sector's performance over the next three years will be the most outstanding among large construction companies, with sales growth and margin improvement combined." She also said, "The full-scale sales from large overseas sites such as Mozambique Area1 and Nigeria LNG will help the recovery of plant sales, further boosting performance improvement next year."

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