[Click eStock] "Jinsung T.E.C, Strong Performance with Additional Growth Potential ↑"

[Asia Economy Reporter Kwon Jae-hee] Eugene Investment & Securities maintained a 'Buy' rating on Jinseong TCC on the 14th, setting a target price of 18,000 KRW.

Jinseong TCC's Q4 sales and operating profit last year were 121.8 billion KRW and 8.3 billion KRW respectively, marking increases of 35% and 4% compared to the previous year. Notably, the operating profit margin, which had been in the 4% range for the past two to three quarters, recovered to the high 6% range in Q4. This was due to the company passing on cost increases such as raw material prices and transportation expenses to product prices. Sales and operating profit for 2022 are estimated to be 521.2 billion KRW and 37.7 billion KRW respectively, representing growth of 19% and 49% year-on-year.

Researcher Han Byung-hwa of Eugene Investment & Securities analyzed, "Except for the Chinese construction machinery market, demand in most markets including the US, Europe, and Japan remains solid," adding, "With the effect of price increases, the operating profit margin is expected to improve from 5.8% last year to 7.2% this year."

The background for this analysis is that China has announced at the Two Sessions its intention to continue an economic stimulus policy, so if the Chinese construction machinery market also recovers, additional growth may be possible.

Researcher Han interpreted, "Jinseong TCC's stock price last year only reflected the negative impact of rising raw material and product prices," and added, "However, starting from Q4, the effect of price increases began to be confirmed, and customer order trends are also favorable."

He further added, "Following the expanded execution of infrastructure budgets, the strong product prices are positively influencing construction machinery demand."