[Click eStock] "Dongbang Seonki, an Undervalued Shipbuilding Equipment Company"

Kiwoom Securities evaluated Dongbang Seon-gi on the 11th as an undervalued shipbuilding equipment company. No investment opinion or target price was provided.

Dongbang Seon-gi is a shipbuilding equipment company mainly producing pipe systems for ships. It primarily manufactures pipe spool products such as carbon steel pipes and stainless steel pipes. Oh Hyun-jin, a researcher at Kiwoom Securities, stated, "Since Dongbang Seon-gi was incorporated into Sejin Heavy Industries and Ilseung in 2021, it has maintained steady external growth and profitable management," adding, "Together with Ilseung, it secured production bases, achieving stable production capacity compared to equipment companies that underwent past restructuring."

Last year, Dongbang Seon-gi recorded sales of 35.7 billion KRW and operating profit of 4.1 billion KRW, representing increases of 31% and 20% respectively compared to the previous year. He noted, "Despite solid external growth, profitability improvement was limited due to investments in automation facilities to enhance productivity," emphasizing, "Investments to improve production efficiency are underway in preparation for increased orders in ship types with high product demand, and through changes in cutting methods and welding automation, we expect profitability enhancement to begin in earnest this year."

Kiwoom Securities forecasted that this year Dongbang Seon-gi’s sales and operating profit will increase by 32% and 130% respectively to 47 billion KRW and 9.4 billion KRW compared to the previous year. He explained, "Following this year’s performance improvement, stable growth is possible due to a mid- to long-term increase in captive volume, but Dongbang Seon-gi’s stock price is currently undervalued due to low market interest," and added, "We anticipate a revaluation of corporate value driven by performance growth."