[Click eStock] "Daewoo E&C, Housing Growth VS Overseas Uncertainty"

Yuanta Securities Issues 'Buy' Investment Rating and 4,600 KRW Target Price... Closing Price on 15th at 2,880 KRW

[Asia Economy Reporter Geum Bo-ryeong] An analysis has emerged that Daewoo E&C faces persistent uncertainties in housing growth and overseas markets.

According to Yuanta Securities on the 16th, Daewoo E&C's third-quarter earnings are estimated at 2 trillion KRW in sales and 101.3 billion KRW in operating profit. Compared to the previous year, sales decreased by 4% and operating profit by 14.9%.

Kim Ki-ryong, a researcher at Yuanta Securities, stated, "The housing and construction projects driving Daewoo E&C's performance are expected to enter an increasing trend compared to the same period last year, despite concerns over the rainy season and typhoons, due to the effect of increased housing pre-sale volume last year." He added, "However, due to COVID-19, sales in civil engineering and plant projects overseas, including Kuwait and Oman, have declined, and following the additional cost reflection in India, Singapore, and Kuwait in the previous quarter, the possibility of cost reflection at overseas sites is expected to persist."

This year's housing pre-sale performance has reached approximately 26,000 units cumulatively by the third quarter, maintaining the annual pre-sale guidance of 35,000 units. Domestic housing pre-sale volume, which hit a low in 2018, is expected to serve as the foundation for a rebound in the housing and construction sector's performance.

Most projects in the Middle East and Africa, which aimed for orders within this year, have been delayed to next year. As a result, overseas order momentum continues to weaken.

Yuanta Securities has given Daewoo E&C a 'Buy' investment rating with a target price of 4,600 KRW. The closing price on the 15th was 2,880 KRW. Researcher Kim said, "Stable profit growth in the housing and construction sector, based on clear pre-sale achievements, is expected to reduce earnings volatility caused by overseas uncertainties."

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