[THE INVESTOR] Analysts raised their target price for Daelim Industrial, South Korea’s major builder, on July 29 as the firm posted better-than-expected quarterly revenue and earnings.
For the quarter ending in June, Daelim Industrial logged 2.56 trillion won (US$2.27 billion) in sales, up 9 percent year on year and operating income of 136.2 billion won, up 115.9 percent from a year earlier.
An apartment complex built by Daelim Industrial in Ulsan, South Korea.
“The earnings surprise was led by improved revenue from housing construction and petrochemicals businesses,” said Kim Hyeong-keun, an analyst at local brokerage firm NH Investment & Securities.
Kim revised the price target on the construction company to 120,000 won from 100,000 won while raising 2016 earnings per share estimates to 8,353 won from 7,932 won, saying Dealim’s valuation will be increased due to reinforcement of its real estate development capability.
Daelim’s shares shed 0.12 percent to 83,500 won in midday trading.
Lee Sun-il, a Daishin Securities’ analyst, also predicted that the stock of Daelim would touch 120,000 won and retained his buy recommendation on the stock.
“Not only Daelim Industrial but also its affiliates and related firms are showing improved performances as the building and housing construction sector is driving a financial turnaround and petrochemicals sector continues to generate higher profit margins,” Lee said.
The analyst expected that the company’s third-quarter earnings would surge 97.7 percent to 134.5 billion won.
By Park Han-na (
hnpark@heraldcorp.com)
