"CS Wind, Performance Improvement Expected... Target Price Raised" [Click e-Stock]

"CS Wind Target Price Set at 93,000 Won... Up 45%"

On April 22, Meritz Securities raised its target price for CS Wind to 93,000 won (a 45% increase from the previous target), while maintaining its "Buy" investment opinion, citing expectations for improved future performance.

According to Meritz Securities' forecast, CS Wind's consolidated revenue and operating profit for the first quarter are expected to be 725.4 billion won (down 20% year-on-year) and 73.9 billion won (down 41%), respectively. However, in the second quarter, both recurring margins and the Advanced Manufacturing Production Credit (AMPC) are projected to improve simultaneously, driven by increased utilization rates at the company's U.S. subsidiary.

Moon Kyungwon, a researcher at Meritz Securities, stated, "The entire company is focused on improving productivity to this end, so the magnitude of profit growth may exceed market expectations," adding, "We are also looking forward to the resumption of offshore wind substructure orders in Europe during the second quarter."

The magnitude of profit improvement is expected to be significant compared to market expectations through 2028. Researcher Moon noted, "While the stock prices of global wind turbine companies like Vestas and Nordex have doubled or tripled, CS Wind's share price has only risen by about 30%," adding, "Based on next year's estimates, the price-to-earnings ratio (PER) is about 12 times, which is more than 60% lower than that of turbine manufacturers."

There are concerns about the disappearance of AMPC profits after 2028, but considering the improvement in recurring margins, the decrease in profits is not expected to be significant. Researcher Moon explained, "Even Vestas is expected to see profit growth in 2027 and 2028, despite the expiration of U.S. AMPC benefits."

Improved cash flow is also expected to have a positive impact on the share price. This year, free cash flow is estimated at approximately 390 billion won, a notable improvement compared to the five-year average of minus 190 billion won.

Researcher Moon concluded, "CS Wind, which has expanded sales through investments, has finally entered the harvest stage," adding, "This year, net debt is expected to be halved compared to two years ago."

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