Attention in the securities industry is shifting from GS E&C's performance this year to the potential for change next year. The assessment is that if the recovery of housing business profits, the new data center business, and improved financial structure following the sale of GS Inima proceed simultaneously, the company's value could rise to a new level.

■ Hanwha Investment Securities: "Buy Rating, Target Price 50,000 Won"... Key Is 2027 Earnings Recovery

Hanwha Investment Securities assigned a 'Buy' rating and a target price of 50,000 won to GS E&C (006360), newly naming it a top alternative pick within the construction sector. The core of this assessment is not short-term performance but the possibility of an earnings recovery in 2027.

While recent declines in housing segment revenue are weighing on overall results, the analysis suggests that once the secured backlog of construction projects begins converting into revenue, the earnings trend could change starting next year. The fact that some costs have already been reflected this year was also cited as grounds for expecting future profitability improvement.

■ Q2 Revenue Down 13.0% and Operating Profit Down 43.6%... Market Says "Structural Change Is What Matters"

GS E&C posted revenue of 2.78 trillion won and operating profit of 91.4 billion won in the second quarter of this year. Compared with the same period last year, revenue fell 13.0% and operating profit fell 43.6%.

However, some in the market assess that rather than judging the mid- to long-term direction based solely on the current decline in results, the upcoming changes in the business structure need to be examined.

■ Data Center and GS Inima Sale Are New Variables

In particular, data centers are being discussed as a new area that could complement the existing housing and construction businesses. GS E&C has been mentioned as a potential participant in the Donghae artificial intelligence data center project, and if actual contract awards and construction begin, a new revenue source could be created.

The sale of GS Inima is also an important variable. Once the sale process is completed, the incoming funds could reduce financial burdens, and it is expected to contribute to lowering the debt ratio and improving net profit. If credit rating improvements also follow, the overall financial structure could change.

■ Stock Price Rises Amid Three Key Checkpoints Ahead

GS E&C's stock price recently showed strength alongside positive assessments from the securities industry. During intraday trading on the 26th, it rose 6% from the previous trading day to as high as 37,100 won. It had also closed at 35,000 won on the 25th, up 3.24%, in the prior trading session.

The variables that will determine GS E&C's future stock price direction are relatively clear: the pace of profit margin recovery in the housing segment, whether the data center business results in actual contracts, and whether financial improvements following the GS Inima sale translate into earnings all need to be monitored.

With Hanwha Investment Securities placing weight on next year's performance, GS E&C now appears to have entered a phase where it is evaluated not only on the recovery of the housing market but also on changes in its business portfolio and improvements in its financial structure.

[Stock prices can exhibit heightened volatility depending on corporate performance, industry conditions, merger terms, market supply and demand, and other factors. Securities firms' analyses and forecasts may differ from actual future results and do not guarantee returns on specific stocks. Before making investment decisions, it is necessary to comprehensively review the company's official disclosures, financial condition, and business progress. This article is not intended to recommend the purchase or sale of any specific stock. This article was written with AI assistance.]