[Click eStock] DL E&C, Plant Division Improvement... Target Price Raised

NH Investment & Securities Report

NH Investment & Securities on the 2nd raised the target price for DL E&C to 38,000 KRW, an increase of 5.5%. The investment rating was maintained at neutral.

In the first quarter, the company recorded sales of 1.8 trillion KRW and an operating profit of 90.2 billion KRW. Although operating profit decreased by 28% compared to the same period last year, it slightly exceeded the market expectation of 85.3 billion KRW. The cost ratios for DL E&C's separate corporation and DL Construction were 89.5% and 94%, respectively. Researcher Lee Eun-sang of NH Investment & Securities stated, "The housing sector underperformed for both companies due to additional cost reflections and one-time issues at specific sites."

In the first quarter, the housing starts for DL E&C's separate corporation and DL Construction were 1,107 units and 0 units, respectively, showing poor performance. In particular, DL E&C's separate corporation's housing starts have shrunk from 23,000 units in 2019 to 9,000 units in 2022, and housing sales are expected to remain at around 3 trillion KRW for the time being.

However, sales and cost ratios in the plant sector are expected to gradually improve. Researcher Lee Eun-sang explained, "Related sales in the first quarter were 254.3 billion KRW, a 99% increase compared to the same period last year, and the cost ratio was 81%. In the second half of the year, the S-Oil Shahin project will be in full swing, offsetting the profit decline in the housing sector."

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