[Click eStock] CS Wind, Below-Expectations Earnings: Can It Surpass in Q4?

[Asia Economy Reporter Junho Hwang] NH Investment & Securities has maintained the target price for CS Wind at 100,000 KRW. It is expected that the performance will reflect the impact of the acquisition and merger of the US subsidiary in the fourth quarter of this year.

CS Wind's operating profit for the third quarter of this year recorded 12.8 billion KRW, down 59.5% compared to the previous year. Sales also decreased by 21.5% year-on-year to 214.5 billion KRW. This figure is about 9% below market expectations. However, in the non-operating section, the net income attributable to controlling interests recorded 10.2 billion KRW due to translation gains from exchange rate increases, exceeding market expectations.

The below-expectation performance is mainly attributed to operational disruptions caused by lockdowns due to COVID-19 in Vietnam and Malaysia. Also, the recognition of sales (40 billion KRW) from the US subsidiary was deferred to the fourth quarter, which had a significant impact.

However, with the normalization of operations at the Malaysia and Vietnam subsidiaries and the reflection of sales from new subsidiaries in the US and Portugal, sales in the fourth quarter of this year are expected to reach 406.8 billion KRW, the highest level ever recorded.

Researcher Yeonseung Jeong of NH Investment & Securities stated, "CS Wind is expected to see substantial expansion starting next year through M&A. In addition to the acquisition effects of the new subsidiaries in the US and Portugal, annual sales next year are projected to increase by 51% year-on-year to 1.73 trillion KRW through facility investments and production expansion at the Turkey subsidiary."