[Click eStock] Kolon Global, Secured Growth "Urgent Need for New Corporate Value Assessment"

[Asia Economy Reporter Lee Seon-ae] DS Investment & Securities announced on the 30th that it is initiating coverage on Kolon Global with a buy rating and a target price of 40,000 KRW. The target price was calculated by applying the construction industry average price-to-earnings ratio (PER) of 7.4 times to this year's estimated earnings per share (EPS) of 5,465 KRW.

Despite strong performance through the second quarter, Kolon Global's stock has been discounted compared to the market due to its perception as a mid-sized construction company. However, it is judged that the company’s value as a renewable energy specialist focused on wind power, as well as a multi-brand dealer with various imported car brands and after-sales service (A/S) and certified used car businesses, needs to be recognized. In particular, if wind power projects expand under the government's Green New Deal policy, Kolon Global’s position as the leading wind power company in Korea is expected to be highlighted, justifying a valuation premium.

The company has already secured an order backlog worth 10 trillion KRW in the construction sector, and with strong imported car sales along with expected growth in A/S revenue and the used car business, performance growth exceeding market expectations is anticipated in the second half of the year. Consolidated results for this year are estimated at sales of 4.8133 trillion KRW (+22.5% YoY) and operating profit of 243.8 billion KRW (+38.2% YoY).

The new growth engine is the renewable energy business led by wind power, and following the revision of the REC weighting at the end of July, onshore and offshore wind power projects are expected to become visible. Currently, the company is pursuing orders for 15 onshore wind power projects worth 2 trillion KRW and offshore wind power projects of a similar scale, and is also advancing to secure a leading position in the wind power repowering market starting with the Yeongdeok wind power complex in Gyeongbuk. Kim Seung-hoe, a researcher at DS Investment & Securities, emphasized, "In particular, the repowering business, which replaces facilities older than 20 years with the latest equipment, is expected to grow rapidly because it is advantageous in terms of land acquisition and permits compared to creating new complexes."

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