KR : DL E&C - QoQ recoveries and attractive valuation

DL has underperformed (vs. peers) in 1H21 on slow revenue and orders but we note that its housing revenue should improve qoq from 2Q21F. As we estimate housing presales to rise 25% yoy in FY21F, we expect OP to recover from FY22F onwards with the housing industry picking up in Korea. It trades at 0.6x FY21-22F P/BV with 13% FY21-22F ROE. We resume coverage with an Add and TP of W180k after DL was spun off from Daelim.

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