[Edaily Reporter Park Jung-Soo ] On the 18th, IBK Investment & Securities projected that BHI Co., LTD.(083650)will continue its growth momentum in the second half of the year, building on its robust order backlog, following second-quarter operating profit that significantly exceeded market expectations. The firm maintained its “Buy” investment rating and target price of 110,000 won. The closing price on the 14th was 61,300 won.
Kim Tae-hyun, an analyst at IBK Investment & Securities, stated, “Second-quarter consolidated revenue and operating profit came in at 296.3 billion won and 45.5 billion won, respectively, representing year-over-year increases of 75.0% and 123.1%, and significantly exceeding both the market consensus and our estimates.” In particular, operating profit exceeded the market consensus of 29.7 billion won by 53%.
In addition to balanced growth across all business divisions—including heat recovery steam generators (HRSGs) and boilers—improved profitability was driven by reduced fixed-cost burdens resulting from expanded sales and enhanced purchasing power. Consequently, the second-quarter operating profit margin reached 15.4%, up 3.3 percentage points year-over-year, marking a quarterly record high. However, net income decreased by 32.0% year-over-year due to losses from derivative transactions resulting from a rise in the exchange rate.
The flagship HRSG division drove earnings growth. Second-quarter HRSG revenue totaled 186.7 billion won, an 80.7% increase year-over-year. This was driven by the conversion of revenue from several projects—including the Saudi LNG combined-cycle power plant secured last year—as scheduled. New HRSG orders amounted to approximately 240.0 billion won, and as of August, cumulative orders were estimated at approximately 440.0 billion won.
The boiler division also continued its steep growth trajectory. Second-quarter revenue reached 61.5 billion won, a 125.9% increase year-over-year, exceeding IBK Investment & Securities’ forecast of 50.5 billion won. Revenue recognition continues from the 517.7 billion won coal boiler supply contract signed with a Philippine utility company last April. Since revenue from this project is scheduled to be recognized over the next 3 to 4 years based on construction progress, it is expected to contribute steadily to earnings.
Growth in the nuclear balance-of-plant (B.O.P.) business was also notable. As deliveries of steel plates for the containment buildings and stainless steel liners for Shin Hanul Units 3 and 4 began in earnest, second-quarter revenue surged 2,059.3% year-over-year to 16.8 billion won.
The order backlog also remains at a high level. As of the end of the second quarter, the order backlog stood at 2.4569 trillion won, a 5.3% increase year-over-year. Domestic orders totaled 757.7 billion won, while overseas orders totaled 1.6992 trillion won.
IBK Investment & Securities forecasts that BHI Co., LTD.’s consolidated revenue for the second half of this year will reach 619.9 billion won, a 32.0% increase year-over-year, while operating profit is expected to rise 46.5% to 62.5 billion won. Analyst Kim explained, “Strong growth is expected to continue as the robust order backlog for not only HRS Co., Ltd. but also boilers and B.O.P. is converted into revenue.”
He added, “If the exchange rate remains at a lower level compared to the end of the second quarter, some of the derivative valuation losses recognized in the first half will be reversed as valuation gains in the second half, creating room for improvement in net income.”