[Click eStock] Doosan, Electronics Division Leads 2Q Earnings Improvement

2Q Operating Profit 293.3 Billion KRW... Turned to Profit YoY
Strong Performance in Proprietary Business and Electronics Sector

[Asia Economy Reporter Minwoo Lee] In the second quarter of this year, Doosan's proprietary business and electronics division achieved solid results, leading to an overall improvement in performance. As asset sales to resolve affiliate liquidity are nearing completion, there is growing anticipation for growth in proprietary businesses centered on fuel cells and new business ventures.

On the 19th, NH Investment & Securities maintained Doosan's target stock price at 120,000 KRW and a 'Buy' investment rating based on this background. The closing price the previous day was 88,900 KRW.

Doosan recorded consolidated sales of 3.5123 trillion KRW and an operating profit of 293.3 billion KRW in the second quarter of this year. Although sales decreased by 17% compared to the same period last year, the operating loss in the billions of KRW turned into a profit.

The operating profit of proprietary businesses, including overseas subsidiaries, was 43.1 billion KRW, up 15% compared to the second quarter of last year. The electronics division also recorded an operating profit of 37.8 billion KRW, a 32% increase during the same period. This growth was driven by an increased proportion of high value-added products for semiconductors and 5G networks, along with the start of mass production of new semiconductor materials. The fuel cell division turned to a loss, with an operating loss of 200 million KRW due to continued sluggishness caused by a lack of orders in the first half of the year. Meanwhile, sales in the new business portfolio, including fuel cell power packs, collaborative machinery, and logistics, reached 78 billion KRW in the first half, a 155% increase compared to the first half of last year.

Operating profit for proprietary businesses in the third quarter is expected to show steady growth due to the impact of new smartphone product launches in the electronics division's upstream industry and improvements in fuel cell performance. The expected operating profit is projected at 55.1 billion KRW, a 2% increase compared to the same period last year. Additionally, the new business portfolio is expected to reach the break-even point by business segment.

There are also positive factors beyond performance. Asset and business sales by Doosan and its subsidiary Doosan Heavy Industries & Construction are entering the final stages to resolve liquidity issues. Doosan Heavy Industries & Construction has repaid 1.5 trillion KRW of the 3 trillion KRW financial support received from policy banks through capital increases and asset sales.

Dongyang Kim, a researcher at NH Investment & Securities, explained, "With the sale of Doosan Infracore this month (worth 850 billion KRW), the financial restructuring agreement may expire next month, and the collateral provided by Doosan (shares of Doosan Heavy Industries & Construction) is expected to be canceled or adjusted in scale. Given the expected expansion of proprietary businesses centered on electronics and fuel cells and the new business portfolio, the dividend per share is likely to be maintained at the year-end level of 2,000 KRW."

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