[Click eStock] "GS Geonseol, Expanding Profitability with New Businesses... Increasing Long-term Investment Appeal"

KB Securities Report

[Asia Economy Reporter Minji Lee] On the 17th, KB Securities maintained its buy rating on GS Construction and kept the target price at 48,300 KRW, up 3.8% from the previous level. This is because long-term profitability is expected to improve considering the increase in housing market share and the full-scale expansion of new businesses.

Jang Moon-jun, a researcher at KB Securities, explained, "Based on the recovery of housing supply last year, the possibility of performance improvement this year has increased," and added, "If the trend of improving housing market share is maintained, mid-term profit growth is also expected."

What can affect GS Construction's long-term stock price is the performance of new businesses. Among various new businesses such as data centers, water treatment business, and housing module business, interest is expected to increase in GS Inima, in which GS Construction holds 100% equity. Unlike typical water treatment companies, GS Inima has shown a compound annual growth rate of 11.9% in sales from 2015 to 2020.

Researcher Jang said, "GS Construction's performance improvement is leading to investment in GS Inima, so continuous growth is expected in the future," and explained, "The corporate value of GS Inima is estimated to be between 1 trillion and 1.4 trillion KRW."

GS Construction's consolidated sales for the first quarter are estimated to be 2.4 trillion KRW, down 1.7% year-on-year. Operating profit is expected to increase by 25.8% year-on-year to 215.1 billion KRW. Researcher Jang stated, "Although the scale is expected to be similar to the same period last year, profit growth is anticipated due to improved cost ratio from the increased proportion of housing sales."

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