[Click eStock] "Daewoo E&C Establishes Foundation for Performance Improvement... Will Accelerate Further This Year"

[Asia Economy Reporter Park Jihwan] Yuanta Securities on the 18th stated that Daewoo Construction (stock code: 047040) laid a clear foundation for performance improvement last year due to increased orders and sales, and expects a more distinct improvement this year. They maintained a 'Buy' investment rating and raised the target price by 56.5%, from 4,600 KRW to 7,200 KRW.

Yuanta Securities analyst Kim Giryong explained, "Daewoo Construction's performance in the fourth quarter of last year is expected to show sales of 2.27 trillion KRW and operating profit of 100.3 billion KRW, representing increases of 1.9% and 123.9% year-on-year, respectively," adding, "Operating profit is expected to fall short of market expectations."

The increase in sales volume leading to expanded sales improvement in the construction housing sector is positive; however, the possibility of additional cost recognition issues related to major overseas civil engineering and plant projects in Kuwait, India, and Singapore throughout the year cannot be ruled out, especially when combined with seasonal factors in the fourth quarter.

In particular, last year is evaluated as having established a clear foundation for performance improvement through increased orders and sales. Analyst Kim Giryong emphasized, "Last year, Daewoo Construction significantly improved both housing sales performance and new orders compared to the previous year," adding, "Especially, the sharp decline in construction housing sales due to reduced sales volume turned into an improvement compared to the same period last year from the third quarter onward, influenced by the recovery of housing sales volume.

Overseas order performance is also expected to be a factor that can expand civil engineering and plant sales, with annual guidance (5.1 trillion KRW) being exceeded due to reflected results such as Nigeria LNG Train 7 (2 trillion KRW) and the Iraq new port (2.9 trillion KRW) at the end of the year. Analyst Kim predicted, "This year, the realization of sales worth more than 3 trillion KRW from major self-developed projects is expected to make performance improvements in the construction and housing sectors more distinct."

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