[Edaily Reporter Park Jung-Soo ] EUGENE INVESTMENT & SECURITIES maintained its “Buy” rating on #JUNJIN C&R on the 24th, noting that revenue growth is expected to turn around and profitability is expected to improve starting in the third quarter. However, reflecting concerns over the price-to-earnings ratio, the firm lowered its target price by 33.3% from 72,000 won to 48,000 won. The closing price on the 21st was 32,050 won.
Park Jong-seon, an analyst at EUGENE INVESTMENT & SECURITIES, stated, “Second-quarter results showed revenue of 47.3 billion won and operating profit of 9.6 billion won. While revenue decreased by 8.2% year-over-year, operating profit increased by 1.7%.” He added, “Compared to the market consensus of 52.1 billion won in revenue and 8.6 billion won in operating profit, revenue fell slightly short, but operating profit slightly exceeded expectations.”
The revenue shortfall was due to weak performance in the concrete pump business across all global regions, including South Korea. Second-quarter revenue from concrete pump products fell 10.4% year-over-year. By region, domestic revenue fell 21.0%, ending a five-quarter streak of growth, while revenue in North America, Europe, and other regions also declined by 67.5%, 2.2%, and 22.1%, respectively.
However, the improvement in profitability was viewed positively. As the cost of sales ratio and the selling, general, and administrative (SG&A) expense ratio both declined, the second-quarter operating profit margin rose by 2.0 percentage points to 20.3% from 18.4% in the same period last year. This marks the first time in seven quarters that the operating profit margin has returned to the 20% range.
EUGENE INVESTMENT & SECURITIES projected JUNJIN C&R’s third-quarter revenue and operating profit at 49.8 billion won and 7.9 billion won, respectively. These figures represent year-over-year increases of 10.8% and 59.5%, respectively. Analyst Park stated, “We expect a gradual shift toward revenue growth and improved profitability starting in the third quarter.”
In the domestic market, the firm expects sales deferred in the first half due to truck supply issues to be reflected in the second half. JUNJIN C&R’s domestic market share stood at 57% as of the second quarter, and the firm cited the growth of the construction market—driven by expanded investment in semiconductors and data centers—as a positive factor in the medium to long term.
In particular, attention was focused on the growth trend in the North American market, which accounts for the largest share of revenue. North American revenue accounted for 59.5% in the second quarter, driven by expanding infrastructure investment in data centers and public facilities. The reduction in tariffs on medium- and heavy-duty trucks—from 25% in the first quarter to the global rate of 10% in the second quarter—is also viewed as a positive factor for earnings recovery. JUNJIN C&R’s market share in the North American construction market rose from 27.5% in 2024 to 28.4% last year.
The firm also forecasts that medium- to long-term growth momentum will continue in Europe and the Middle East. In Europe, housing construction demand in Türkiye and public housing projects are driving momentum, while in the Middle East, although supply is being delayed due to geopolitical risks, demand for future reconstruction and construction projects is expected to materialize. Demand for regional infrastructure construction—including infrastructure, housing, and transportation—ahead of the 2032 Brisbane Olympics was also cited as a growth factor.
Researcher Park explained, “Although we are lowering the target price from the previous 72,000 won to 48,000 won due to concerns over the price-to-earnings gap, we maintain our ‘Buy’ rating.” He added, “We applied a 45% discount to the average price-to-earnings ratio (P/E ratio) of domestic peers and comparable companies to reflect the unstable earnings volatility stemming from global geopolitical risks.”