[Click eStock] "Doosan Bobcat, Recovery of Demand in the Americas"

US Housing Market Expected to Remain Strong Until Next Year
Daishin Securities Maintains Doosan Bobcat Target Price at 54,000 Won

[Asia Economy Reporter Gong Byung-sun] Doosan Bobcat posted third-quarter results this year that exceeded market consensus, supported by a recovery in demand in the Americas. The U.S. housing market continues to show strength, indicating that the industry is entering an upward trend.

According to Daishin Securities on the 1st, Doosan Bobcat's third-quarter sales this year increased by 42% year-on-year to KRW 1.5463 trillion, and operating profit rose by 17% to KRW 129.6 billion. These figures surpassed the respective consensus estimates by 10.74% and 10.17%.

If the industrial vehicle segment, which is reflected from this quarter, is excluded, the results are even better. Excluding the industrial vehicle segment, third-quarter sales increased by 18% year-on-year to KRW 1.2856 trillion, and operating profit rose by 13% to KRW 125.7 billion. These are 8% below and 7% above the respective consensus estimates. Lee Dong-heon, a researcher at Daishin Securities, explained, “The industrial vehicle segment’s profitability weakened due to the container shortage crisis.”

Positive results were also shown across regions. Sales in the Americas, Europe-Middle East-Africa (EMEA), and Asia-Latin America-Oceania (ALAO) increased by 19%, 32%, and 44% year-on-year, respectively. This is interpreted as demand growth driven by the base effect from COVID-19 and economic recovery in key markets.

The industry outlook is also favorable. Although interest rate hikes are expected, the U.S. housing market is projected to remain strong through next year. The Biden administration has pledged to build 2 million homes, along with additional infrastructure investments. Researcher Lee said, “Stock prices fell sharply due to production shortages caused by supply chain disruptions, but order volume has tripled compared to last year,” adding, “We recommend buying due to the excessive price drop.”

Accordingly, Daishin Securities maintained a ‘Buy’ rating and a target price of KRW 54,000 for Doosan Bobcat. The previous day’s closing price was KRW 38,050.

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