Hana Securities has raised its target price for DL E&C from 80,000 won to 100,000 won, reflecting expectations for improved performance due to an increase in contracts for data centers and power plants. The investment recommendation remains a 'buy.'
Kim Seung-jun, a researcher at Hana Securities, stated, "DL E&C has been selected as the construction company for the 100 MW building of a 300 MW artificial intelligence (AI) data center being developed in the Songshan Industrial Complex in Dangjin, South Chungcheong Province, and is currently in the pre-construction phase. The company plans to begin construction in early November, with expectations for contracts worth about 1 trillion won in the fourth quarter, aiming to start services in the first quarter of 2028, which will accelerate revenue generation."
He added, "We can also expect linked contracts for the B and C buildings, each with a capacity of 100 MW, and we anticipate data center contracts worth 2 trillion won in the second half of this year and another 2 trillion won in 2027."
Kim also highlighted expectations for additional contracts due to the expansion of power plant projects. DL E&C has secured contracts worth 500 billion won for the Dongjeju Combined Cycle Power Plant and 244.1 billion won for the Asan Combined Heat and Power Plant this year. He noted, "Based on these references, we can raise expectations for contracts related to the Texas Encinhal Combined Cycle Power Plant construction project, which is the first major investment project in the U.S."
Furthermore, Kim explained that the Texas Encinhal project has a total capacity of 6.3 GW, with plans to construct 1.4 GW of gas power in the first phase and gradually expand to 4.9 GW of combined cycle power. He emphasized that DL E&C has the advantage of synergy through collaboration with its affiliate, DL Energy.
He concluded, "We have adjusted our valuation to reflect the anticipated data center contracts in the second half of this year and next year, the potential for EPC contracts for the combined cycle power plant in the U.S., and expectations for public contracts from LH."
* This article has been translated by AI.
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