[Asia Economy Reporter Park Jihwan] Ebest Investment & Securities stated on the 3rd that Hyundai Construction is expected to experience a performance decline of over 20% in the second quarter due to the slowdown in overseas sales growth caused by the novel coronavirus disease (COVID-19).
Researcher Kim Seryeon of Ebest Investment & Securities said, "Hyundai Construction's second-quarter sales are projected to be 4.1285 trillion KRW, down 11.8% year-on-year, and operating profit is expected to decrease by 22.4% to 190.2 billion KRW," he stated.
Researcher Kim diagnosed, "Despite the strong performance of domestic housing sites, the overall growth slowdown is inevitable due to delayed reflection of sales from overseas sites caused by COVID-19."
He evaluated that it is regrettable that the expectation for an overseas sales turnaround must be postponed due to external factors such as COVID-19.
Researcher Kim said, "Considering the deterioration of site mix due to schedule delays and the possibility of additional cost reflection, we have also revised upward the estimated overseas cost ratio," adding, "Accordingly, we have conservatively revised the estimates to show negative growth in both annual sales and profits."
He added, "Due to external factors, the conversion of the order backlog of 54 trillion KRW already secured into sales is slowing down," and "Hyundai Construction's consolidated net cash exceeds 3 trillion KRW, which supports the downside valuation of the current market capitalization of 3.7 trillion KRW."
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