"GS E&C expected to win AI data center contracts"... Target price raised 30%

[Financial News] On the 15th, Hyundai Motor Securities said that the group’s AI data center business taking shape would serve as a catalyst for GS E&C’s share price. It maintained its Buy rating and raised its target price by 29.0%, from 31,000 won to 40,000 won.
“Steady earnings are expected across the divisions, without any major one-off factors,” said Shin Dong-hyun, a researcher at Hyundai Motor Securities. “GS’s Donghae AI data center project, which is gradually taking shape, will serve as a catalyst for GS E&C’s share price.”
The company’s consolidated revenue for the third quarter of this year is expected to come in at 2.7558 trillion won and operating profit at 124.5 billion won, in line with market expectations. The figures would be down 14.1% and 16.1%, respectively, from the same period last year, while operating profit is forecast to rise 36.4% from the previous quarter.
Researcher Shin said, “As housing presales have declined since 2022, revenue from building and housing is expected to continue falling year on year, but solid gross margins should support stable earnings. With few units scheduled for move-in in the second half, the possibility of a meaningful impact from completion-settlement gains or losses is also limited.”
He cited GS Group’s Donghae AI data center campus project as a catalyst for the share price. The first project in Phase 1, which has a total planned capacity of 1.2 GW, is expected to have a capacity of 100 MW and received building approval on the 1st. Hyundai Motor Securities estimates total construction costs for Phase 1 at approximately 9.8 trillion won and the construction contract for the first project at approximately 800 billion won.
Researcher Shin said, “There are still events that could drive the share price, including additional orders for some of sites 2 to 4 for GS E&C and progress on Phase 2. The group’s AI data center projects are advancing at a very rapid pace, so contract wins and their contribution to earnings could be seen in the near term.”

[email protected] Joo Won-gyu Reporter