[Click eStock] DL E&C, the Rain That Ends the Drought of Orders

[Asia Economy Reporter Junho Hwang] Korea Investment & Securities maintained the target price of DL E&C at 210,000 KRW on the 31st, expecting a significant increase in sales from housing construction sites this year and strengthened order capabilities in the plant sector.

DL E&C announced on the 30th that it had secured a large-scale plant construction project worth 1.5645 trillion KRW (DL E&C 1.3068 trillion KRW, Russian local subsidiary 257.7 billion KRW). This project involves building a polymer unit at the Baltic Sea Gas Chemical Complex in Russia. The facility produces two types of polyethylene (PE) and linear alpha olefins (LAO) using ethylene produced from an ethane cracker.

The project owner is the Baltic Chemical Complex, funded by RusGazDobycha, a Russian natural gas production company. The main EPC contractor is CC7, a Chinese state-owned construction company. CC7, as the primary contractor, performs only the C (construction) part of E (detailed design), P (procurement), and C (construction), while E and P are subcontracted separately to DL E&C.

Including this project, DL E&C has secured a total of 2.3 trillion KRW worth of plant sector projects this year. This is the largest scale since 2016 and exceeds the annual order target of 1.5 trillion KRW by 56%.

Kyungtae Kang, a researcher at Korea Investment & Securities, stated, "Sales in the plant sector are expected to turn to a recovery trend." He added, "Due to the drought in orders following the pandemic, DL E&C's plant sales decreased for four consecutive quarters compared to the same period last year until the third quarter of this year, but with this order, the order backlog will increase to the low 2 trillion KRW range, and sales this year are estimated to increase by 48% compared to last year."

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