[Click eStock] “Jinsung T.E.C, Limited Impact from China Evergrande Crisis”

Non-China Sales Share Exceeds 70%... US Market Conditions Especially Important
Eugene Investment & Securities "Maintain Jinseong TEC Target Price at 18,000 Won"

[Asia Economy Reporter Gong Byung-sun] The stock price of Jinseong TCC has been declining recently due to its connection with excavator sales in China. However, with over 70% of sales coming from outside China, it is expected that the impact of the Chinese real estate group Evergrande crisis will be limited.

On the 27th, Eugene Investment & Securities maintained its investment opinion of "Buy" and a target price of 18,000 KRW for Jinseong TCC. Although the stock price has fallen recently by 5.14% on the 23rd and 2.92% on the 24th, the target price was not adjusted.

Domestic construction machinery companies, including Jinseong TCC, have been linked to the Chinese Evergrande crisis, but Eugene Investment & Securities believes the stock price decline is excessive. Researcher Han Byung-hwa of Eugene Investment & Securities explained, "Jinseong TCC's sales outside China exceed 70%, and the U.S. market conditions are particularly important," adding, "The U.S. housing and construction markets remain strong, and starting next year, the largest infrastructure stimulus investment in decades is likely to begin."

The current infrastructure stimulus plan by the Joe Biden administration in the U.S. includes not only the replacement of aging railroads, ports, roads, and bridges but also the establishment of a continental strategic network, large-scale renewable energy, and hydrogen project construction. All these plans require construction machinery.

The outlook for Jinseong TCC in the second half of the year is also expected to be bright. Demand for construction machinery is favorable due to the recovery of industrial conditions in non-Chinese markets such as the U.S. Additionally, the company is expanding its business scope from parts to modularization while also increasing its customer base. In fact, it is expanding products for new customers such as Bobcat, Hitachi, and Deere. Accordingly, Eugene Investment & Securities forecasted Jinseong TCC's sales for the third and fourth quarters of this year to be 106 billion KRW and 108.2 billion KRW, respectively, representing increases of 52% and 20% compared to the same periods last year.

Researcher Han evaluated, "Jinseong TCC's stock price is still influenced by the short-term Chinese construction machinery cycle," and added, "It is currently undervalued."