Hana Securities forecasted on the 20th that the profitability of the tower division of CS Wind will normalize this year. They maintained a 'Buy' investment rating and a target price of 70,000 KRW.
CS Wind's sales in the fourth quarter of last year decreased by 2.9% year-on-year to 420.1 billion KRW, while operating profit turned positive to 34.4 billion KRW during the same period, meeting market expectations.
Yoo Jae-sun, a researcher at Hana Securities, analyzed, "Although the volume of towers was significantly delayed, resulting in a considerable decline in scale, approximately 200 billion KRW of performance from the substructure company Bladt as of December last year was reflected in the consolidated results, partially offsetting the decline." He added, "Excluding the negative impact of the Advanced Manufacturing Production Tax Credit (AMPC) effect this quarter, the operating profit margin improved to 9.4% compared to 4.8% in the previous quarter."
Researcher Yoo anticipated a recovery in the tower division starting this year. He explained, "The expansion of subsidiaries in the United States, Vietnam, and Portugal will lead to growth in scale, and especially, the proportion of major customers' volume at the U.S. subsidiary will increase," adding, "As sales of the North American subsidiary increase, the AMPC will also expand."
Furthermore, he added, "Including the recognition of deferred sales, the completion of expansions at major production subsidiaries, process optimization, improvement in the proficiency of secured personnel, and product mix enhancement are expected to gradually restore profitability going forward."
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