[Click eStock] "Daewoo E&C, Huge Q1 Earnings... Maintaining Preferred Stock Status"

[Asia Economy Reporter Ji Yeon-jin] Ebest Investment & Securities announced on the 6th that Daewoo E&C is expected to show a full-fledged performance turnaround through aggressive housing sales of 33,000 units this year, maintaining its position as the second-best large construction stock.

Daewoo E&C's sales in the first quarter of this year are expected to increase by 12.5% year-on-year to 2.2342 trillion KRW. Operating profit is predicted to rise by 20.7% to 146 billion KRW, which is similar to the market consensus of 149 billion KRW. Researcher Kim Se-ryeon of Ebest Investment & Securities said, "Although construction is in the seasonal off-season in the first quarter, it seems possible to achieve 97.5% of the previous fourth quarter's peak sales of 2.2914 trillion KRW in this quarter," adding, "this is because we judged that the turnaround in the housing sector would become visible based on the strong supply of 33,000 housing units last year."

Considering economies of scale from the expansion of housing sites and completion settlement profits due to increased move-in volumes, there is a forecast that the margin rate can be raised compared to current estimates. With the increase in housing performance and margin improvement in the overseas plant sector, which had been experiencing widening losses, the earnings per share (EPS) growth rate this year is expected to reach 71%.

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