[Click eStock] "Doosan, Stock Price Excessively Undervalued... A Buying Opportunity at Low Price"

[Asia Economy Reporter Minji Lee] Daishin Securities maintained a buy rating on Doosan on the 17th, stating that the current stock price is excessively undervalued. The target price was set at 90,000 KRW, down 14% from the previous target, reflecting changes in the subsidiary's shareholding ratio and share value.

Doosan appears to have posted results exceeding market expectations in the fourth quarter of last year. The company is estimated to have recorded consolidated sales of 5.1717 trillion KRW, operating profit of 302.9 billion KRW, and net profit of 201 billion KRW. The operating profit surpassed the market estimate of 279 billion KRW.

Doosan's own business segment posted fourth-quarter sales of 783.4 billion KRW and operating profit of 70.6 billion KRW, up 14.2% and 158.6% respectively compared to the same period last year.

By business segment, the Battery BG recorded an operating profit of 21.7 billion KRW, a 155% increase year-on-year. The Industrial Vehicle and Motrol segments posted operating profits of 11 billion KRW and 18.5 billion KRW, increasing by 28% and 48% respectively.

Researcher Jihwan Yang of Daishin Securities explained, "Motrol's performance, which was sluggish in the second and third quarters of last year, is normalizing," adding, "The Battery BG segment is also showing improved profitability as the proportion of high-end products increases."

Despite recent solid performance, Doosan experienced a significant correction due to financial risks highlighted during recent fundraising processes and allegations of poor audits related to its subsidiary Doosan Heavy Industries.

Researcher Yang said, "Although the first-quarter performance of the business segment located in China will somewhat decline due to the impact of COVID-19, economic stimulus in China is expected after the pandemic," and added, "Since the company's own business segments such as Electronics BG and Motrol are expected to post solid results in 2020, the stock price will rebound rapidly once uncertainties related to subsidiaries are resolved."

Doosan confirmed a quarterly dividend of 1,300 KRW per share at the end of the fourth quarter last year. A similar level of dividends is expected in 2020. Researcher Yang explained, "Considering an annual dividend of 5,200 KRW, the current stock price is excessively undervalued."