Heungkuk securities said on the 1st that GS Holdings(078930), backed by operating profit growth at key subsidiaries, is expected to post solid results this year. It maintained a "Buy" investment rating and raised the target price to 170,000 won. GS Holdings' previous closing price was 127,100 won.
For GS Holdings' third-quarter results this year on a consolidation basis, revenue is forecast at 7.7 trillion won and operating profit at 1.5 trillion won. Those would be up 18.8% and 67.1%, respectively, from a year earlier, and the company is expected to continue delivering solid operating results following the previous quarter.
Some subsidiaries are showing weakness, but key subsidiaries GS Energy and GS Caltex are expected to continue generating solid operating profit, and GS Retail's results are also projected to keep growing.
This year's full-year results on a consolidation basis were slightly revised up to revenue of 29.7 trillion won, up 17.9% from a year earlier, and operating profit of 5.7 trillion won, up 94.1%.
Park Jong-ryeol of Heungkuk securities said, "Unlike last year, GS Caltex and GS Energy's operating performance this year will likely remain steady," adding, "That's because GS Energy's power and district energy and resource development are generating stable profit, and GS Caltex's refining margins for refining and lubricants are also likely to stay firm."
The analysis was that this is because supply-demand instability will continue due to geopolitical risks and operating disruptions in the region.
Park also said, "Most subsidiaries, including GS Retail, GS P&L and GS Global, are expected to see gradual improvement in results."
In addition, GS Group plans to build a 2.4 GW mega-scale AI data center campus in Gangwon Province with a total investment of 30 trillion won.
Park explained, "GS Power, GS EPS and GS E&R have know-how in supplying large volumes of stable electricity for AI data centers, and GS Engineering & Construction, Xi C&A and DC Bridge have accumulated experience in building and operating data centers."