[Asia Economy Reporter Hyunseok Yoo] Meritz Securities analyzed on the 8th that Taekwang is expected to see a turnaround in orders starting from the 2nd quarter. The investment opinion was maintained as 'Buy', and the target price was raised from the previous 9,500 KRW to 13,000 KRW.
Researcher Hyun Kim of Meritz Securities explained, "Last year was supposed to be the inaugural year benefiting from the recovery of large overseas EPC projects and shipbuilding orders, but due to COVID-19, export ports were closed and the construction schedules of clients were temporarily suspended as a force majeure, so expectations for performance were deferred to this year." He added, "We expect a turnaround in order performance from the 2nd quarter, projecting annual orders of 214.5 billion KRW this year and 231.2 billion KRW next year."
He said, "Taekwang has a relatively higher proportion of orders from overseas EPC companies compared to competitors," and added, "Although the domestic construction industry maintains a conservative stance on overseas orders, overseas industrial facility orders have been resuming since the second half of last year."
Additionally, profitability improvement is expected for HYTC, a connected company related to secondary batteries. He evaluated, "As domestic captive volume passes its bottom and overseas direct orders increase, the speed of performance improvement due to operating leverage effects is likely to accelerate," and "The profitability of the connected company HYTC is expected to contribute to profit improvement on a consolidated basis."
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