SEOUL, April 7 (Korea Bizwire) – South Korea’s construction equipment makers led by Doosan Infracore Co. are forecast to have posted strong results in the first quarter, mainly thanks to their strong sales in the Chinese market, industry sources said Wednesday.
According to the survey on three analysts by Yonhap Informax, the financial news arm of Yonhap News Agency, Doosan Infracore, South Korea’s No. 1 construction equipment maker is predicted to have recorded 139 billion won (US$125 million) in net profit in the January-March period, up 86 percent from a year ago.
Its sales came to 2.33 trillion won during the period, with its operating profit reaching 239 billion won, the analysts said.
“The strong performance was attributable to brisk sales in emerging markets, including China,” said Hwang Eo-yeon, an analyst at Shinhan Financial Investment Co. in the report released Wednesday.
Hwang estimated Doosan Infracore sold 7,114 units of construction equipment in the first quarter in China, worth 553.6 billion won, up 78 percent from a year ago.
Lee Dong-heon and Lee Tae-hwan, analysts at Daeshin Securities Co., echoed Hwang’s view in their latest report.
The analysts also said Doosan Infracore may get a boost from the takeover by Hyundai Heavy Industries Holdings Co. (HHIH), a shipbuilding giant.
The shipbuilding group has construction equipment maker affiliate Hyundai Construction Equipment Co. under its wing.
Analysts said the deal would help Doosan Infracore gain a healthy financial footing.
In February, Doosan Infracore decided to sell its construction equipment business division to HHIH for 850 billion won. The sale of Doosan Infracore’s division is slated to be completed within the third quarter.
In a poll on six analysts by Yonhap Informax, Hyundai Construction Equipment’s operating profit is estimated to have risen more than fourfold in the first quarter to 48.6 billion won from a year ago, with its sales estimated at 811.3 billion won, up 27.5 percent.
Hyundai Construction Equipment is estimated to have sold 3,163 units of construction equipment in the first quarter in China, rising more than two times the number a year ago, and 1,136 units of construction equipment in India, up 57 percent, according to Shinhan Financial’s Hwang.
The acquisition of the operating division of Doosan Infracore will also help Hyundai Construction Equipment stage a good performance in the near future, the analysts at Daeshin Securities said.