Will Doosan Achieve Record Quarterly Performance for Its Electro-Materials BG?

[Financial News] Meritz Securities said on July 1 that Doosan's third-quarter results for its Electro-Materials BG are expected to surpass those of the second quarter, reaching a record quarterly high. The brokerage raised its estimates for the unit's third-quarter revenue and operating profit by 6.8% and 5.6%, respectively, from its previous forecasts, projecting revenue of KRW 756.7 billion and operating profit of KRW 226.3 billion. It maintained its Buy rating and fair value of KRW 2.4 million.
“Driven by increased shipments for the Vera Rubin platform, revenue from sales to NV, its key North American customer, is expected to grow 34.7% quarter on quarter to approximately KRW 277.3 billion, leading company-wide growth,” researcher Yang Seungsoo said. “Revenue from optical modules is also expected to more than double quarter on quarter to KRW 105.9 billion in the third quarter, fueled by explosive growth in demand from AI data centers.”
After factoring in Doosan Electro-Materials BG's capacity expansion investment plans, including the ongoing brownfield expansions in China and South Korea and the expansion of a new plant in Thailand, the unit's CCL production capacity is expected to increase by approximately 163% from current levels based on the number of lines.
“Concerns that limited capital spending compared with competitors could dampen the unit's mid- to long-term growth have served as a factor behind its valuation discount. Against this backdrop, we view the expansion as a positive change that will ease those concerns,” Yang said. “The additional capacity is expected to be fully reflected in Electro-Materials BG's results in 2028. We expect a full-scale revaluation of the stock when market expectations for earnings growth in 2028 begin to rise.”
Meritz Securities projected Doosan Electro-Materials BG's 2028 revenue and operating profit at KRW 5.2858 trillion and KRW 1.7496 trillion, respectively.
 


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