[Click eStock] "Daewoo E&C, Reconfirming the Competitiveness of the Prugio Brand"

Selected as the Reconstruction Contractor for Gwacheon Jugong 5 Complex on the 7th
KTB Investment & Securities "Maintains Daewoo Construction Target Price at 10,000 Won"

[Asia Economy Reporter Gong Byung-sun] Recently, Daewoo E&C reaffirmed its competitiveness by winning the reconstruction construction contract for Gwacheon Jugong Complex 5 after a competition with GS E&C. It is expected that profitability will also improve as the sales proportion of high-margin overseas sites expands in the future.

According to KTB Investment & Securities on the 9th, Daewoo E&C won the competition against GS E&C and was selected as the construction company for the Gwacheon Jugong Complex 5 reconstruction on the 7th. With this, after Choongheung Construction was selected as the preferred bidder for the sale, Daewoo E&C has secured a total of six urban maintenance projects worth 2.3 trillion KRW.

It is also confirmed that the competitiveness of Daewoo E&C’s brand ‘Prugio’ has not weakened. Rajin Sung, a researcher at KTB Investment & Securities, explained, “We reaffirmed the competitiveness of Prugio,” adding, “Winning the competition against GS E&C has symbolic significance.”

Profitability is expected to improve as the sales proportion of high-margin overseas sites such as Iraq and Nigeria expands in the future. Currently, Daewoo E&C holds a pipeline worth about 19 trillion KRW over three years in key countries including Nigeria, Iraq, and Libya. The performance of the Vietnamese THT corporation, in which Daewoo E&C holds 100% equity, is also stable.

However, the big bath phenomenon, which reflects accumulated losses as much as possible in the accounting books, was reflected in the third-quarter performance this year. Daewoo E&C’s sales in the third quarter of this year recorded 2.1001 trillion KRW, down 5% from the previous quarter, and operating profit decreased by 42% to 112.3 billion KRW during the same period. This was due to delays in construction caused by conflicts over sale prices with the Housing & Urban Guarantee Corporation (HUG) and significant costs incurred at plant and civil engineering sites. Approximately 74 billion KRW in costs caused by COVID-19 and price increases in the Middle East and Southeast Asia regions were reflected in the books.

Accordingly, KTB Investment & Securities maintained Daewoo E&C’s investment opinion as ‘Buy’ and the target stock price at 10,000 KRW. The closing price on the previous day was 6,140 KRW.

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