[Click eStock] "Doosan Faces Major Turning Point After 10 Years"

Yuanta Securities "Doosan Target Price Set at 150,000 KRW"
Financial Risk in Final Stage... Business Transition to Renewable Energy is Key

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] An analysis has emerged that Doosan is entering a major turning point. Expectations are rising that it will exit creditor management in the second half of this year and that its business will recover to past levels. Yuanta Securities newly set a target price of 150,000 KRW and a 'Buy' investment rating for Doosan.

On the 7th, Yuanta Securities evaluated that Doosan's financial risk, which has continued for the past 10 years, is entering its final stage. The liquidity crisis of the Doosan Group originated from the aggressive acquisition of Doosan Bobcat by Doosan Infracore in 2007 and the poor performance of Doosan Construction starting in 2011. Nevertheless, due to continuous support for Doosan Construction and a delayed response to energy transition, Doosan received loans totaling 3 trillion KRW from the Korea Development Bank and the Export-Import Bank last year.

Yuanta Securities assessed that creditor management of Doosan was positive from a sustainability perspective. Namgon Choi, a researcher at Yuanta Securities, said, "If Doosan graduates from creditor management in the upcoming second half and succeeds in reducing net borrowings to 2.4 trillion KRW, the group's credit rating could improve," adding, "With a credit rating upgrade, short-term borrowings can be converted into long-term borrowings, reducing financial costs."

Doosan's own business is also evaluated to have potential. The combined value of the Electronics BG, which focuses on copper-clad laminate (CCL) as its main product, and the Fuel Cell Power BU (FCP) and Fuel Cell America (FCA) businesses producing hydrogen fuel cells exceeds 1 trillion KRW. Researcher Choi explained, "Attention should also be paid to how Doosan will utilize the 750 billion KRW from the sale of industrial vehicles to be received in the future," and added, "Expansion of businesses such as logistics solutions, robotics, and mobility innovation is also expected."

Accordingly, Yuanta Securities analyzed that Doosan is included as a good stock candidate. Researcher Choi said, "Due to the stock price decline, Doosan has become more attractive in terms of price, and the group's financial risks are diminishing," and evaluated, "Even with Doosan's own business alone, the market capitalization appears undervalued." However, maintaining a profit trend is key. Researcher Choi explained, "Doosan Heavy Industries has set the annual order amount margin line to generate operating profit through fixed cost reduction at 5 trillion KRW," and added, "For the target achievement to continue in the mid-term, a successful transition to renewable energy businesses replacing existing businesses such as coal, desalination, construction, and domestic nuclear power must be achieved."

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