[Click eStock] "Stability Appeal... DL E&C Target Price Maintained"

On the 8th, LS Securities maintained a buy rating and a target price of 42,000 KRW for DL E&C, stating that it is a "time when safety is highlighted." The previous day's closing price was 32,550 KRW.

On the same day, Kim Seryeon, a researcher at LS Securities, said, "DL E&C's Q4 sales and operating profit last year are expected to be 2.1787 trillion KRW and 97.4 billion KRW respectively, both in line with the market consensus." Compared to Q4 2023, sales are expected to decrease by 6.6%, while operating profit is expected to increase by 10.4%.

Researcher Kim noted, "The scheduled cost adjustments for sites with potential additional cost increases at DL Construction will continue for the time being," adding, "However, DL E&C's separate housing margin appears to have already entered a somewhat stable routine due to a conservative business approach. This is positive in terms of limiting large profit volatility."

He also emphasized the stability compared to leading companies in the same industry. Researcher Kim said, "Compared to the industry-leading group, DL E&C's overwhelmingly strong financial structure and low project financing (PF) exposure will act as strengths that cushion the downside of the stock price in the recently slowing market," adding, "The stable earnings trend will highlight valuation advantages in the short term."

Given that the recent stock price corresponds to an extremely undervalued range, a short-term buying strategy is also expected to be effective. Researcher Kim added, "Considering the continued sales growth in the plant sector and the already confirmed stable margin improvement in the housing sector, the strength of a stable foundation compared to the leading group with increased volatility could be re-emphasized in the first half of this year."