[Click eStock] Doosan Bobcat, Stock Price Expected to Rise as Overhang Issue Resolves

KB Securities Report

KB Securities maintained a buy rating on Doosan Bobcat on the 8th and raised the target price by 43% from the previous level to 60,000 won.

At the end of November last year, under a price return swap (PRS) contract with the major shareholder Doosan Enerbility, 5 million of the 9.87 million shares of Doosan Bobcat held by four securities firms were sold to institutional investors through off-hours block trading at 37,000 won per share. The discount rate was significant at 10.5%, and the remaining 4.87 million shares after the sale continued to weigh on the stock price.

However, with the completion of the sale of the remaining shares through off-hours block trading before the market opened, the overhang issue is expected to be completely resolved. According to the investment banking (IB) industry, NH Investment & Securities, Korea Investment & Securities, Kiwoom Securities, and ShinYoung Securities conducted a demand forecast for an institutional block deal of approximately 4.87 million Doosan Bobcat shares held under the PRS the previous day.

Jung Dong-ik, a researcher at KB Securities, said, “The discount rate offered by the sellers was 6.11% to 8.03% lower than the previous day’s closing price, ranging from 36,150 won to 36,900 won per share, but the solid fundamentals and the fact that this is the last batch of shares appeal to investors, so the transaction price is expected to be determined near the lower end of the discount band.”

Accordingly, a normal valuation based on performance and industry conditions is expected to become possible. Researcher Jung Dong-ik explained, “The effects of product price increases, stable order backlogs, and increased shipments due to the resolution of logistics difficulties will help maintain solid performance despite concerns about economic slowdown in developed countries.”

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