[Click e-Stock] "Daewoo E&C, Nuclear Power Expectations... Target Price Raised"

On the 24th, KB Securities raised its target price for Daewoo Engineering & Construction from 6,700 won to 9,000 won, an upward revision of 34%, while maintaining its "Buy" investment rating. The firm judged that, reflecting Daewoo Engineering & Construction's strengthened position in the nuclear power plant industry and the easing of earnings uncertainty, there is 20% upside potential compared with the closing price of 7,500 won on the 23rd.

KB Securities views 2026 as the first year in which nuclear power moves beyond expectations and materializes as an actual business. The recent sharp share price rally was analyzed as the result of nuclear power plant business expectations being rapidly priced in. KB Securities explained that after it upgraded its investment rating from "Hold" to "Buy" in early February, the share price rose by more than 40% in just six trading days. It assessed that the large-scale loss booked in the fourth quarter of 2025 has largely resolved future earnings uncertainty, thereby creating conditions for the nuclear power plant momentum to come to the fore.

Jang Moonjun, an analyst at KB Securities, said, "The key issue is how quickly and how many additional business opportunities the company can secure," forecasting that, starting with the Czech nuclear power plant project, accumulating experience in executing large-scale overseas nuclear power plant projects will become the core of its mid- to long-term competitiveness.

The company is expected to return to profitability in 2026. Revenue in 2026 is projected at 798.4 billion won, operating profit at 48.1 billion won, and net profit attributable to controlling shareholders at 28.5 billion won. The analysis is that, after a large deficit in 2025, the company will enter a phase in which its earnings power normalizes. However, the housing cost ratio and changes in the financial structure were presented as downside risks. Whether nuclear power plant orders expand and whether earnings normalization continues are expected to determine the future direction of the share price.

The target price was calculated by applying a target price-to-book ratio (P/B) of 1.0 times to a 12?month forward book value per share (BVPS) of 8,971 won. KB Securities lowered the cost of equity to 7.5% and raised the applied return on equity (ROE), thereby increasing the multiple. Taking into account the potential for an increase in nuclear power plant orders and the trend toward earnings normalization, KB Securities judged that a re-rating of the current valuation is justified.