[Click eStock] "Doosan Bobcat, Starting Point of Q4 Earnings Recovery"

[Asia Economy Reporter Park Jihwan] Daishin Securities maintained its 'Buy' rating and target price of 40,000 KRW for Doosan Bobcat on the 5th, stating that the company will begin a path of earnings recovery starting from the fourth quarter of last year.

Lee Dongheon, a researcher at Daishin Securities, predicted, "Doosan Bobcat is expected to record sales of 1.1397 trillion KRW and an operating profit of 103 billion KRW in the fourth quarter, showing growth of 1% and 7% respectively compared to the previous year."

Sales of new products (GME) accumulated over the first three quarters increased by 111% year-on-year, and this trend continued into the fourth quarter. Inventory of existing products held by dealers has decreased to 2-3 months, and it is analyzed that recovery will be seen after the presidential election.

The researcher stated, "Marketing costs decreased due to the launch of the renewed R-series model for existing products, and overall cost reductions continued due to COVID-19," adding, "Recovery of dealer inventory, the base effect of COVID-19, and benefits from infrastructure investments are expected to be reflected." Accordingly, performance in the first half of this year is expected to increase by 16% in sales and 47% in operating profit compared to the previous year.

He said, "Although the stock price has shown weakness due to concerns about the US housing market after the COVID-19 vaccine, the US housing market is considered to have structural growth, and infrastructure investments have also been added," adding, "Supply and demand factors are judged to be temporary."

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