[Featured Stock] Doosan Hits 52-Week High as Brokerage Target Prices Rise

Doosan hit a new 52-week high again shortly after the market opened on the 6th, buoyed by favorable reviews from the securities industry.

As of 9:45 a.m. that day, Doosan was trading at 287,500 KRW on the KOSPI, down 2,000 KRW (0.69%) from the previous close.

The stock opened at 289,000 KRW and then reached a new high of 299,000 KRW. Afterwards, profit-taking selling flooded the market, bringing the price back to the 280,000 KRW range.

The upward trend in the stock price was influenced by consecutive reports from the securities industry stating that Doosan's business competitiveness has improved and that it is expected to benefit from governance improvements such as the expansion of directors' fiduciary duties.

iM Securities raised its target price from 265,000 KRW to 350,000 KRW, stating that holding companies like Doosan would be the biggest beneficiaries if directors' shareholder fiduciary duties are introduced.

Researcher Lee Sang-heon of iM Securities said, "If directors' shareholder fiduciary duties are introduced, it will change the agency cost structure from controlling shareholders versus minority shareholders," adding, "This could soon provide an opportunity for outside directors to escape the controversy of being mere rubber stamps."

He pointed out, "In the case of holding companies like Doosan, due to dual listings of the holding company and its subsidiaries, liquidity discounts are inevitable, and there is a high possibility of conflicts of interest arising between controlling shareholders and minority shareholders."

BNK Investment & Securities also raised its target price for Doosan to 350,000 KRW on the same day, up 40% from the previous 250,000 KRW.

Researcher Kim Jang-won of BNK Investment & Securities noted, "In 2017, sales increased by 16% year-on-year and operating profit rose by 64.8%, driven by an increase in high value-added products centered on FCCL and OLED, global diversification of sales channels including Apple and Greater China, and expansion of new applications," adding, "At that time, the proportion of high value-added products rose by 2 percentage points, and the sales share of non-Samsung customers including Apple and Greater China increased by 7 percentage points."

He also mentioned, "Although it may be difficult to revisit the topic of affiliate spin-offs and mergers, Doosan Robotics has potential for increased equity value and utilization through expansion of the collaborative robot business, which should be considered in Doosan's valuation."