[Click e-Stock] "Doosan, Profitability Improvement Slows... Target Price Down"

NH Investment & Securities lowered the target price for Doosan from 137,000 KRW to 110,000 KRW on the 3rd. The investment rating was maintained at 'Buy.'

Doosan recorded sales of 4.5388 trillion KRW and an operating profit of 319.7 billion KRW in the third quarter. Operating profit fell 6% year-on-year, missing market expectations. This was due to a decline in Doosan Bobcat's profitability caused by increased promotion costs amid high interest rates.

Despite the successful listing of Doosan Robotics, in which Doosan holds a 68.2% stake, the stock price has plunged more than 50% over the past month and a half due to the withdrawal of investment demand, weakening consolidated earnings momentum, and increased market volatility. However, NH Investment & Securities considers the stock to be "excessively undervalued," taking into account the steady growth of key listed affiliates, the possibility of partial cash realization after the end of the lock-up period for Doosan Robotics, and strengthening the business portfolio through the establishment of a CVC.

Kim Dongyang, a researcher at NH Investment & Securities, said, "The semiconductor production cuts and reduced data center investments, which are front industries of the electronics sector, have slowed the pace of profitability improvement," adding, "In the fourth quarter, gradual earnings improvement is expected to continue, driven more by an increased proportion of high-margin products and expanded sales of materials for electric vehicles than by an industry recovery."

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