Tuesday, June 24th, 2014
SEOUL, KOREA - Shinhan Investment & Securities said on June 23 that Korea Plant Service & Engineering, KPS, is one of the most reliable companies in Korea and that its mid- and long-term growth outlook is very promising due to a rise in domestic and international demand. The securities firm maintained its investment opinion on the stock at "buy," with the target price at 85,000 won.
Huh Min-ho, Shinhan Investment & Securities analyst, said, "The number of nuclear power reactors whose age is older than 30 years will rise to 66 by 2016 and 91 by 2020 from 55 last year. The sales revenue of KPS will steadily rise as the number of old reactors increases." The analyst put the company's sales from the nuclear plant repair and maintenance business at the range of 200-350 billion won a year.
He also said, "The company's overseas sales would rise to 135.4 billion won this year and 180.8 billion won in 2015 from 97.2 billion won last year. Based on its price competitiveness against other rivals, KPS will be able to earn more than 300 billion won from overseas projects."
"The price earnings ratio of 18 expected for the whole year is undervalued comparing to the ratio of 29 at which most Korean public companies go global. Considering the high degree of confidence in its profit growth, the price earnings ratio of 22 would be adequate for KPS," he added.