"GS Engineering & Construction Races Ahead in the 'Land of Opportunity' Vietnam" [Click e-Stock]

Early Land Acquisition
GS E&C Expected to Stand Out in Premium Residential Sector

GS Engineering & Construction is expected to achieve higher profitability through its development projects in Vietnam. With a prevailing preference for foreign developers within Vietnam and a substantial amount of land already secured, analysts believe the company will benefit from a first-mover advantage.

On the 16th, Kiwoom Securities maintained its target price for GS Engineering & Construction at 27,000 won and its "Buy" investment rating, citing these factors. The previous day's closing price was 19,460 won.

Kiwoom Securities considers Vietnam to be a "land of opportunity" for construction companies. Vietnam's gross domestic product (GDP) growth rate is expected to exceed 6% in the coming years. In this environment, real estate continues to be an attractive investment asset. In particular, GS Engineering & Construction is expected to stand out in the premium residential sector, where demand for investment assets is strong. The local preference for foreign developers in Vietnam was also cited as a positive factor.

Since 2007, GS Engineering & Construction has secured land use rights in Vietnam. The company is expected to benefit further due to land price increases and last year's revision of the land law. With rising land prices and officially assessed land values raising barriers to entry for new players, GS Engineering & Construction is expected to enjoy the advantages of early market entry.

GS Engineering & Construction is currently undertaking three major projects in Vietnam: the Thu Thiem project, the Nha Be project, and the Long Binh project. All are located in key areas of Ho Chi Minh City's development plans. As many of these projects are still in their early stages, they are expected to serve as growth drivers for the company's new business division over the mid- to long-term.

In Thu Thiem, development is possible on Block 307 (154 units), Block 3-3 (345 units), and Block 1-15 (with a floor area ratio of 1,300% and one office building). The Nha Be project consists of Phase 1-2/3 (47 hectares), Phase 2 (183 hectares), and Phase 3 (98.9 hectares). The Long Binh site covers 34.5 hectares in Site A and 57.2 hectares in Site B. While revenue is not expected to increase rapidly in the short term, full-scale construction is expected to begin in 2026.

Shin Daehyun, a researcher at Kiwoom Securities, stated, "The sale price of GS Inima was recently set at 1.68 trillion won, and most of the cash from the sale will be used to repay debt." He added, "With the divestment of GS Inima, the scale of new businesses will be reduced, making the roles of overseas development projects, including those in Vietnam, and modular housing increasingly important in the future."