[Edaily Reporter Kim Hyung-il ] Yuanta Securities Korea analyzed that while the annual new order guidance for BHI Co., LTD.(083650)has been revised downward, there is a strong possibility that earnings estimates could be revised upward if additional large-scale orders materialize in the future. The firm maintained its “Buy” rating and target price of 120,000 won.

On the 14th, Kim Do-yeop, an analyst at Yuanta Securities Korea, stated, “We forecast that BHI Co., LTD.’s third-quarter consolidated revenue will reach 293.9 billion won, a 43.6% increase year-over-year, and operating profit will rise 84.4% to 33.9 billion won,” adding, “The operating profit margin is expected to be 11.5%.”

The primary business driving this earnings growth is the Heat Recovery Steam Generator (HRSG) division. Analyst Kim projected that third-quarter HRSG revenue would reach 183.1 billion won, a 104.7% increase year-over-year.

In the boiler segment, revenue is estimated to reach 57.2 billion won as revenue recognition from the Philippines project continues. This represents a year-over-year increase of 95.2%. In the nuclear power plant equipment (B.O.P.) segment, revenue is projected to reach 17.3 billion won, driven by growth from Shin Hanul Units 3 and 4. This represents a year-over-year increase of 1,463.7%.

Non-operating income and expenses are also expected to contribute to the improved performance. Analysts predict that valuation losses on derivatives—which occurred due to the weak won in the first half of the year—will turn into valuation gains as exchange rates stabilize in the third quarter. Accordingly, pre-tax profit is estimated at 85.1 billion won, a 465.1% increase year-over-year, while net income attributable to controlling shareholders is projected to rise 454.1% to 64.6 billion won.

However, the annual new order target has been lowered. BHI Co., LTD. has revised its annual order guidance for this year downward from the previous 2 trillion won to between 1 trillion and 1.4 trillion won. This adjustment reflects growing uncertainty regarding whether the company will be able to secure an Eastern European engineering, procurement, and construction (EPC) project worth 500 billion to 600 billion won by the end of the year.

Analyst Kim explained, “Although the annual new order target has been lowered, there is ample potential to revise earnings estimates upward as future EPC orders in Eastern Europe and additional large-scale new orders become more concrete.”

Cumulative orders as of the end of September were estimated at approximately 880 billion won. Of this amount, about 800 billion won is expected to come from HRSG-related orders. Analyst Kim added, “Operating profit margins have improved recently due to cost savings achieved during the detailed design phase, stronger purchasing bargaining power, and an increased share of high-margin projects,” noting, “We believe these positive effects will continue into the second half of the year.”