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Stocks of Doosan Infracore Co. traded at an almost yearly high on Wednesday as the country's leading construction equipment maker's business performance is expected to improve down the line, analysts said.
Doosan Infracore closed at 9,530 won ($8.30) on the Seoul bourse, down 0.83 percent from the previous session's close. On Tuesday, the company advanced 4.68 percent.
Analysts said stronger than expected sales of excavators in China is helping the company move up.
Doosan Infracore sold a total of 1,202 excavators in China last month, more than quadrupling from a year earlier. Its market share stood at 8.6 percent last year, also up 1.2 percentage points from a month earlier, according to industry sources.
"Doosan Infracore's performance in China is better than expected, and its bottom line is also expected to improve as well down the road," said Cho Cheol-hee, an analyst at Korea Investment & Securities.
Doosan Infracore is also set to benefit from the Trump administration's proposed plan to spend massive amounts of money on infrastructure.
Doosan Infracore has been on a steady rise since the US presidential election amid optimism that the company and its affiliate Doosan Bobcat Inc. may see increased sales after Trump unveiled a plan to spend $1 trillion on infrastructure -- tunnels, roads and ports.
Doosan Infracore's business performance is also in part helped by its affiliate Doosan Bobcat which made its market debut here last year.
Doosan Bobcat is a leading player in the small construction machinery sector in the United States, and Doosan Infracore owns some 59 percent of the company.
Last year, Doosan Infracore swung back into the black from a year earlier on improved business conditions and reduced costs in the wake of tough restructuring.
Net profit reached 116 billion won last year, compared to a loss of 859 billion won a year earlier, it said earlier.
Operating income was tallied at 491 billion won, compared to an operating loss of 95.1 billion won a year earlier, while sales fell 3.9 percent on-year to reach 5.73 trillion won.
Doosan Infracore earlier expected to log an operating income of 505 billion won on sales of 6.1 trillion won this year, which mark a 2.8-percent and a 5.7-percent hike, respectively, from last year.
Lee Kang-rok, an analyst at Kyobo Securities, said a total of
63,000 excavators were sold in China last year, and for this year, it would exceed 70,000 units.
"Strong demand for construction equipment in China, and Doosan Infracore's cost-cutting efforts, will help jack up its earnings," Lee said. (Yonhap)
