[Edaily Reporter Kwon Oh Seok ] NH INVESTMENT & SECURITIES announced on the 11th that it is maintaining its “Buy” rating on DaewooEngineering&Construction(047040)and raising its target price from 26,000 won to 30,000 won.

Lee Eun-sang, an analyst at NH INVESTMENT & SECURITIES, said, “We view positively the growing prospects for Team Korea’s nuclear power plant exports following the announcement of investments in the U.S., as well as the imminent awards of contracts for key projects such as LNG.”
The target price was raised by increasing the target multiple to reflect the rising stock prices of peer nuclear power companies and by adjusting the EBITDA (earnings before interest, taxes, depreciation, and amortization) estimates in anticipation of imminent plant order wins.
He analyzed, “The announcement of investment in the U.S. for eight large-scale nuclear power plants has once again highlighted DaewooEngineering&Construction’s export competitiveness, which is based on its experience as a lead contractor for nuclear power plants,” adding, “With the number of Korean construction companies possessing such experience now narrowed down to three, and considering the business priorities of competitors, it is highly likely that DaewooEngineering&Construction will participate as a construction partner for Team Korea.”
The firm decided to maintain its assumption that Daewoo E&C will secure orders for a total of six nuclear power plants (two in the Czech Republic, two in Vietnam, and two in the U.S.) over the next three years. The analyst noted, “Winning contracts for major projects, such as LNG, is also imminent. “There were five major projects for which the company raised its order guidance by 50% during its second-quarter earnings announcement,” the analyst explained, adding, “There have been additional disclosures regarding two of these projects: the selection of Daewoo E&C as the preferred bidder for the Papua New Guinea LNG project and the receipt of a letter of intent to award the contract for the ‘Rovuma’ LNG project in Mozambique.”
He added, “DaewooEngineering&Construction is the only domestic company with a track record as a prime contractor for LNG liquefaction projects and one of only seven companies globally,” noting, “Amid the post-war trend of accelerated LNG FID (Final Investment Decision) awards, the company’s competitiveness in the LNG sector will be re-emphasized.”
The company projected third-quarter operating profit of 186.5 billion won (up 230% year-over-year), which is expected to exceed market consensus. It also anticipated that the strong performance in the construction segment seen in the previous quarter would continue.