[Click eStock] DL E&C's Orders Increase... Discounts Shrink Alongside Growth

[Asia Economy Reporter Lee Seon-ae] Daishin Securities announced on the 17th that it maintains a buy rating and a target price of 190,000 KRW for DL E&C. This is due to expectations of increased order performance this year. The target price was calculated by applying a target price-to-book ratio (PBR) of 0.9 times to the expected average book value per share (BPS) of 219,730 KRW for this year. The target PBR is the average of major domestic construction companies from 2015 to 2020.

Researcher Dongheon Lee of Daishin Securities analyzed, "Since the spin-off, the company has shifted to an aggressive business expansion strategy," adding, "With an increase in pre-sales, valuation attractiveness will be highlighted."

DL E&C's annual order target surged to 13.6 trillion KRW (+29% yoy). By business division, housing is 6.2 trillion KRW (+90%), civil engineering 1.5 trillion KRW (+139%), plant 2.7 trillion KRW (+6%), and DL Construction 3.2 trillion KRW (+6%).

Researcher Lee noted that while the risks related to Russia need to be monitored depending on the severity of sanctions, the progress rate is low, so provisions are expected to be minimal.

He also judged that the discount will decrease along with growth. Researcher Lee stated, "A discount of 0.2 to 0.3 times PBR compared to competitors has been sustained, which is due to a conservative business strategy," and added, "The discount rate will decrease as orders and performance grow."

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