DB Securities on the 28th maintained a "buy (BUY)" rating on Doosan(000150), saying the recent share-price pullback has greatly eased valuation pressure. However, reflecting a broad market valuation decline due to the KOSPI correction, it lowered the target price to 1.8 million won from 2.5 million won.
Researcher Jo Hyeonji at DB Securities said, "Despite the recent share-price weakness, earnings momentum is actually strengthening," and noted, "The mismatch of strong results and a low valuation can be a buying opportunity."
Doosan's electronics BG posted record quarterly results in the second quarter this year with revenue of 676 billion won and operating profit of 201.3 billion won. As the share of high-end CCL and optical module products expanded to about 85% of total sales, profitability improved further, analysts said.
In particular, supported by growing demand for server and graphics DRAM, sales of CCL for semiconductor packaging rose 17% from the previous quarter. The expansion of AI server investment is translating into higher sales of high-value-added products, the company said.
DB Securities projected that the earnings improvement trend will continue in the second half. It expected major businesses—including network boards, semiconductor packaging, and optical modules—to grow evenly, with increased volumes from clients and the effects of new production capacity (CAPA) expansions being fully reflected.
Electronics BG's operating profit is estimated to rise to 215.7 billion won in the third quarter and 243.8 billion won in the fourth, bringing full-year operating profit to 846.4 billion won, up 74.5% from a year earlier.
In particular, mass production is set to begin on a new network board line in the fourth quarter. Researcher Jo projected that, with end-market demand still solid, the new line will record a high utilization rate immediately after startup and further accelerate earnings growth.
Although the target price has been lowered, the investment appeal remains high. Jo said, "We adjusted the target price due to the recent KOSPI weakness, but earnings momentum remains intact with increased volumes from key clients in the third quarter and capacity expansion in the fourth," adding, "Valuation is also excessively low compared with competitors."