April 20, 2024

• 

[THE INVESTOR] Doosan Infracore’s second-quarter earnings will be surprisingly high, said KB Investment and Securities on June 29, maintaining a “buy” recommendation and 13,500 won (US$12.05) target price.

On the back of fast-growing emerging markets including China, its revenue in the period will hike 20.3 percent on-year to 132.9 billion won and operating profit by 22.3 percent to 262.5 billion won, widely beating market expectations. Sales of excavators in China leapt 77.3 percent in April and May from a year ago to 43,000 units, and will reach an accumulated 58,000 in second the quarter, up 78.6 percent on-year. Annual sales in the country will come to record 173,000 this year, said analyst Jeong Dong-ik.

Investors should also pay attention to the rising share of larger equipment that will result in higher revenue and improved profits. The sales ratio of smaller and larger equipment shifted to 60:40 in the first quarter from 73:27 of the same period last year, according to the analyst. 

Recent trade disputes between the US and China has increased market fluctuation but considering the better-than-expected excavator sales in China and solid second-quarter earnings, this could be a chance to purchase its stocks, he said.

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