[Click eStock] "Daewoo Construction Expected to Achieve Annual Order Target... Stock Momentum May Recover"

[Asia Economy Reporter Kwon Jae-hee] Ebest Investment & Securities maintained a 'Buy' rating on Daewoo Engineering & Construction on the 3rd, setting a target price of 8,000 KRW.

Daewoo Engineering & Construction is expected to achieve its annual plans across all business sectors this year, including housing, civil engineering, and plants. The company's annual order intake target is 12.2 trillion KRW, of which housing orders reached 8.8 trillion KRW considering the contractor selections as of the end of July. This exceeds the annual housing order target of 8.3 trillion KRW. Civil engineering orders currently stand at 700 billion KRW, somewhat short of the annual plan of 1.6 trillion KRW, but are expected to be achieved by year-end. The plant sector has already met its annual plan with 1.5 trillion KRW, so the overall annual order intake target is expected to be comfortably met.

However, significant cost recognition occurred in the housing sector due to building materials and cost adjustments. With a housing order backlog of 32.6 trillion KRW, the absolute volume is large, and the increase in estimated costs is believed to have been reflected relatively significantly. Nevertheless, with the peak-out of building material prices, stable cost levels are expected to be restored from the third quarter.

Pre-sale achievements are also expected to be met without major difficulties. In the first half of the year, 8,944 units were pre-sold, and there appears to be little difficulty in achieving the annual pre-sale target of 28,919 units.

Overseas orders after 2023 mainly consist of nuclear power plants and LNG projects, which are core business areas for Daewoo Engineering & Construction, making it likely that orders will be secured without difficulty. Specifically, this includes being selected as the preferred negotiator for the 1.5 trillion KRW Czech nuclear power plant project, contracts for the Polish nuclear power plant (2023) worth 2 to 3 trillion KRW, and contracts for two Southeast Asian LNG projects (2023?2024) with amounts yet to be determined.

Researcher Kim Se-ryeon of Ebest Investment & Securities stated, "We view positively the potential to secure growth drivers and profitability in the plant sector through nuclear power and LNG orders next year," adding, "If orders become visible, stock price momentum is expected to recover."

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