[THE INVESTOR] CS Wind will profit more than 30 billion won (US$27.72 million) by taking over Samhyun Engineering, said Eugene Investment and Securities on Feb. 22, maintaining a “buy” recommendation and 45,000 won (US$41.56) target price.
Its decision to issue exchangeable bonds will lead to rise in stock price, said analyst Han Byeong-hwa.
The wind tower maker has announced that it will issue exchangeable bonds worth 40.5 billion won for M&A and has acquired wind power generation company Samhyeon’s 34.13 percent stake for 13.1 billion won, and by a simple calculation it has reaped more than 30 billion won, noted the analyst. Samhyeon is capable of generating 50 billion won revenue and 5 billion won net profit even by conservative estimates, he explained.
Considering that key wind power parts makers received an average of 20 times price-earnings ratio, Samhyeon Engineering is worth 100 billion won and is expected to go public by the end of this year, added Han.
By Hwang You-mee (glamazon@heraldcorp.com)