Shinhan Investment Corp. raised its target price for BHIC from 100,000 won to 110,000 won on August 19, reflecting expectations for expanded order regions, conversion of a robust order backlog into revenue, and an increased share of high-margin projects. The investment opinion remains a 'buy.'
Han Seung-hoon, a researcher at Shinhan Investment, stated, "We have revised our annual operating profit estimates upward, considering the conversion of a substantial order backlog into revenue, the increased share of high-margin projects, cost improvements, and the effects of operating leverage." He noted that the operating profit estimates for 2026 and 2027 have been raised by 27.1% and 23.5%, respectively.
In the second quarter, BHIC's performance exceeded market expectations. The company reported second-quarter revenue of 296.3 billion won, a 75% increase compared to the same period last year, while operating profit surged 123.1% to 45.5 billion won, surpassing market consensus of 247.8 billion won and 29.7 billion won, respectively.
Han added, "With continued recognition of orders from the Middle East, sales of heat recovery steam generators (HRSG) increased by 80.7% to 186.7 billion won, and revenue recognition from the Philippines' circulating fluidized bed boiler and major auxiliary equipment for Shinhanul Units 3 and 4 also continued." He noted that the operating profit margin was 15.4%, reflecting the impact of high-margin projects and cost improvements.
Looking ahead, the expansion of order regions is expected to serve as a momentum for the stock price. He stated, "Currently, HRSG orders are concentrated in Asia and the Middle East, while nuclear power plant BOP orders are focused on large domestic nuclear plants. If the order pipeline expands to Europe and North America in the future, it will be crucial for a re-rating of the stock price."
* This article has been translated by AI.
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