NH Investment & Securities announced on August 24 that it has raised its target price for GS Construction from 33,000 won to 42,000 won, an increase of 27.3%, citing the company's participation in large-scale data center projects as a driver for growth. The firm maintained its 'buy' rating.
Lee Eun-sang, a researcher at NH Investment & Securities, stated, "We positively assess the strengthening of the new business portfolio centered on data centers based on captive demand," adding that data center-related revenue is estimated to reach approximately 5 trillion won.
GS Construction is expected to participate in a 2.4 GW data center construction project allocated to GS. The first phase, a 1.2 GW project, has a power supply plan linked to the Bukpyeong Industrial Complex in Donghae and GS Donghae Power. GS Construction applied for a building permit in Donghae on August 3, aiming to start construction within the year and complete it by 2029.
The total construction cost for the first phase is estimated at around 12 trillion won. NH Investment & Securities forecasts that about 5 trillion won of this will be reflected in revenue, incorporating profits from the Donghae data center project, which is expected to commence by the end of the year.
GS Construction is establishing a value chain for data centers through its subsidiary, Jai C&A, and Jibesco Asset Management, covering everything from design and construction to leasing and operation. There are also indications that the approximately 1.3 trillion won from the sale of GS Inima, expected by the end of the year, may be used for equity investment in the data center business.
The researcher noted, "Future capital attraction for the data center business, lease agreements, and expansion of construction personnel will be key factors for stock price reevaluation."
* This article has been translated by AI.
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