Korean builders are regaining investors’ attention after U.S. President Donald Trump has begun to pitch his so-called national rebuilding program through $1 trillion spending on infrastructure three months after inauguration.

According to the Korea Exchange (KRX) Monday, SK Innovation Co., the largest refiner in Korea, saw its share price surge 12.3 percent Friday compared to the beginning of the year. Stocks of the nation’s largest steelmaker Posco and U.S. - based construction equipment maker Doosan Bobcat Inc. rose 5.6 percent and 4.5 percent, respectively, over the cited period.

Of the three, Posco is expected to enjoy the biggest gain from infrastructure demand in the U.S. that could push up steel demand and prices. Iron ore with 62 percent content in Qingdao had risen 20.3 percent to $94.9 in late February from $78.9 in the beginning for the year. Prices fell since then amid skepticism about Trump’s infrastructure agenda, but are expected to rebound as Trump began meeting business leaders and lenders to draw financing for infrastructure pledge.

Posco raked in 1.2 trillion won ($1.05 billion) in operating profit on sales of 14.6 trillion won (tentative earnings report) in the first three months this year. Its first-quarter operating profit is up a whopping 82 percent from a year earlier. Industry watchers expect its share to reach a fresh record high if global steel prices could jump due to supply shortage and U.S. demand. Posco shares closed Tuesday at 271,500 won, down 0.37 percent from the previous session in Seoul trading.

Market data provider FnGuide estimated Posco’s full-year 2017 operating profit to gain 44 percent on year to over 4 trillion won.

Doosan Bobcat, a U.S. subsidiary of Doosan Infracore Co., - excavator-making subsidiary of Doosan Heavy Industries & Construction Co. - is also expected to enjoy a boon off the U.S. administration’s investment plan that would be coupled with a tax reform of sharply lowering corporate tax rates to uniform 15 percent from current range of 15 - 39.5 percent At present, Doosan Bobcat is levied with 39 percent rate. Lower tax will translate into immediate increase in net profit. Its net income is expected to jump 37 percent to 246.7 billion won this year from a year earlier. Kospi-listed Doosan Bobcat shares closed Tuesday at 37,700 won, up 2.31 percent from the previous session.

SK innovation, whose main businesses are oil refining and production of petroleum products, will also benefit on increased fuel demand and exports of petroleum products. Petroleum business has made up 48 percent of the firm’s total operating profit last year. Shares of SK Innovation closed down 1.22 percent at 162,000 won Tuesday.

What’s more, the three firm’s stocks have room to grow as they are undervalued, experts say. Posco’s price-to-book ratio (PBR) stands at 0.51, SK Innovation 0.79 and Doosan Bobcat 1.06.

By Moon Il-ho

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