Doosan (000150.KS), cited as a leading beneficiary of expanding artificial intelligence (AI) investment, has had its target price raised once again by the brokerage sector. Analysts say the performance of the electronics business group (BG), the company's core business, is improving markedly as supplies of high-value-added products to Nvidia increase, while subsidiary Doosan Enerbility's expansion of nuclear power orders is also boosting corporate value.
Daishin Securities maintained its "BUY" investment opinion on Doosan on Tuesday and raised its target price to 2.22 million won.
Daishin Securities pointed to the electronics BG business as the key driver of Doosan's rising value. The electronics BG is a division that produces high-specification copper clad laminate (CCL) used in AI servers and data centers, and is directly benefiting from the recent expansion of global AI infrastructure investment. In particular, the firm assessed that performance growth is accelerating as CCL supply for Nvidia's next-generation AI chip, the Blackwell GPU server, gets into full swing.
In fact, the proportion of high-end products in the electronics BG expanded from 73% last year to 82% this year. The average selling price (ASP) also rose 38.5%, from 49,676 won in the third quarter of last year to 68,799 won in the first quarter of this year. Profitability also improved significantly as sales of high-value-added products increased. In the first quarter of this year, the electronics BG's operating profit margin reached 30.1%, exceeding that of global competitors such as Taiwan's EMC, TUC, and ITEQ.
"With expanding AI infrastructure investment, demand for high-end CCL is increasing structurally," said Lee Kyung-yeon, an analyst at Daishin Securities. "As the expansion of supply to Nvidia and the effect of improving product mix work in tandem, the profit strength of the electronics BG is rising to a higher level."
Daishin Securities analyzed that about half of Doosan's current net asset value (NAV) comes from the electronics BG business. It valued the electronics BG's corporate value at 23.6 trillion won.
The growth of subsidiary Doosan Enerbility is also cited as a positive factor. Doosan Enerbility's nuclear power order volume is forecast to surge from about 900 billion won last year to around 6.8 trillion won this year. Orders of about 5 trillion won are also expected next year. In addition, its gas, hydrogen, and renewable energy businesses are continuing to grow.
"Doosan Enerbility's expansion of nuclear power orders is leading to a rise in equity value," Lee said. "Vertical integration of the semiconductor value chain is also underway, centered on Doosan Tesna and Semifive, so its value as a business holding company will be further highlighted."
Daishin Securities assessed that Doosan's current discount rate relative to NAV remains high at about 47%. The target price was calculated by applying a 38% discount rate to a NAV of 48.7 trillion won, and the firm presented upside potential of about 29.9% relative to the current share price.
