Shinhan Investment Corp. evaluated on July 13 that GS Construction has secured new growth momentum through its investment in AI data centers under the GS Group. As a result, the firm raised its target price for GS Construction from 37,000 won to 46,000 won while maintaining a 'buy' rating.
Kim Sun-mi, a researcher at Shinhan Investment Corp., stated, "The new business sector has been dispersed across various fields, leading to weak growth momentum. However, the decision to invest in AI data centers has transformed this into a strong momentum for growth." She added, "The goal for data center operations is likely to begin with orders and construction starting next year, with significant performance increases expected from 2027."
For the second quarter, Shinhan Investment Corp. projected that GS Construction's performance would slightly fall short of market expectations, estimating consolidated sales and operating profit at 2.7 trillion won and 115.1 billion won, respectively.
Kim noted, "The slowdown in housing sales due to a recent decrease in new sales, reduced settlement profits, and increased bidding costs for urban redevelopment projects will impact performance."
However, she anticipates an improvement in performance starting in the second half of the year, supported by the new sales of 11,000 housing units in the first half, the resumption of sales by Xi S&D, and the expansion of data center construction by Xi C&A, along with profitability improvements.
In particular, the Donghae AI data center project was highlighted as a key momentum. Kim emphasized, "Considering the operational goals for the data center, it is necessary to commence the project within this year. The Donghae AI data center is a large-scale project with an order size of about 10 trillion won, and its short construction period will significantly contribute to short-term performance."
She added, "If the Donghae AI data center project materializes in the third quarter, it could lead to upward revisions of performance estimates."
* This article has been translated by AI.
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