April 26, 2024

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[THE INVESTOR] Doosan is strengthening its own business through absorbing a series of affiliates, said NH Investment and Securities on March 21, maintaining a “buy” recommendation and 180,000 won (US$168.22) target price. 

Operating profit from its main business this year will hike 55 percent to 379.1 billion won, beating previous estimates of 352.2 billion won, said analyst Kim Dong-yang.

It has secured funds and future growth by taking over subsidiary DIP Holdings earlier this month and is planning to absorb another subsidiary Doota Mall in June. Its operating profit from distribution sector will expand to 40.9 billion won, according to the analyst. 

Meanwhile the company will further strengthen its shareholder friendly policy, forecast Kim. It is in the process of retiring its stocks and its dividend per share, having increased for 10 consecutive years, will have more room to rise from strong flagship business, he explained. 

Its current stock price is undervalued, discounted 56 percent from the current net asset value, from concerns over liquidity of its affiliates, but the issue has been partially eliminated as Doosan Heavy Industries & Construction managed to reduce its net borrowings and secure financial means through bloc sales of Doosan Engine, added Kim. 

By Hwang You-mee (glamazon@heraldcorp.com)