[Click e-Stock] "Shinsung ENG: From Semiconductor Infrastructure to Data Centers... Earnings Momentum"

Target Price Raised to 43,000 Won

On May 20, Daol Investment & Securities raised its target price for Shinsung ENG from 28,000 won to 43,000 won and maintained its 'Buy' investment opinion.

Ko Youngmin, a research analyst at Daol Investment & Securities, commented on Shinsung ENG, saying, "With intensive investment in downstream semiconductor infrastructure and the expansion of high-margin solar business, earnings momentum is expected to be maximized through 2027. Continued reports of infrastructure investment by memory clients and the expansion of data center and solar power adoption are being confirmed, which are expected to act as upward triggers for the share price."

In the first quarter of this year, Shinsung ENG posted sales of 15.37 billion won, up 32% year-on-year. Its operating loss was 2.2 billion won. This is considered a lackluster performance, falling short of the market expectation of 100 million won in operating profit (OP). The reason for this is the delayed revenue recognition of certain projects in both the Clean Environment (CE) and Renewable Energy (RE) segments.

The delayed projects are ongoing in the second quarter. Analyst Ko stated, "In addition, the order backlog is also increasing rapidly as planned. We expect to see meaningful earnings growth through the second quarter, as anticipated."

This year, Shinsung ENG's sales are projected at 684 billion won, with operating profit forecast at 20.2 billion won. Analyst Ko explained, "Globally, there is a common shortage of semiconductor fabs. This is a period of concentrated infrastructure investment, and record-high sales in the CE segment are highly likely."

He added, "The solar module business (RE) is also in active discussions for entry into the data center market, and starting in 2027, it is expected to proceed in earnest with multiple clients. These projects are expected to be more profitable than existing solar business operations."

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