[Click eStock] "Hyundai Construction Sets Housing Sales Target at 50,000 Units This Year... Performance Improvement"

[Asia Economy Reporter Ji Yeon-jin] Hana Financial Investment stated on the 25th that it maintains a buy rating on Hyundai Construction, judging that its future performance will improve based on an increase in housing supply and the normalization of major overseas sites that were halted due to the novel coronavirus disease (COVID-19). The target stock price is 52,000 KRW.

Hyundai Construction's consolidated sales in the fourth quarter of last year decreased by 7% year-on-year to 4.3254 trillion KRW, and operating profit fell by 47% to 90 billion KRW. Due to the pre-recognition of 100 billion KRW in costs at sites in Dubai, Qatar, and Kuwait, operating profit was about 50 billion KRW below market expectations. However, net profit during this period turned to a loss as foreign exchange translation costs of 220 billion KRW were reflected due to the strengthening of the Korean won.

This year, Hyundai Construction plans to supply 31,000 housing units, a 60% increase from last year, and Hyundai Engineering will also supply 20,000 units, a 150% increase. Considering the nationwide annual supply plan of 420,000 units, the supply market share reaches 12%. Analyst Yoon Seung-hyun of Hyundai Construction said, "This level comfortably secures the number one position in housing supply market share," and added, "As the housing business order strategy expands from existing redevelopment projects to general contracting and quasi-self projects, the possibility of achieving the housing supply target is relatively high."

Regarding overseas projects, the Saudi Majan Oil & Gas project, which started construction in 2019, was delayed due to COVID-19, but sales of 1 trillion KRW are expected to be reflected this year. Additionally, for the 'Panama Metro' and 'Qatar Lusail Tower' projects won last year, sales are expected to begin in earnest from the second half of this year, so annual overseas performance is also expected to improve gradually, according to analyst Yoo.