[Click eStock] Hyundai Construction, Overseas Orders Are Disappointing but...

[Asia Economy Reporter Hwang Junho] NH Investment & Securities on the 14th named Hyundai Construction as the top preferred stock in the construction industry and maintained the target price at 65,000 won.

Currently, stock prices in the construction sector, including Hyundai Construction, are generally sluggish due to concerns over the slowdown in the real estate market. Issues such as unsold housing in Daegu in the first half of the year, real estate policies of presidential candidates from both ruling and opposition parties, and continuous interest rate hikes have influenced this trend. This atmosphere is similar to that of 2017 and 2018, when the main investment points were the proportion of orders and sales in the metropolitan area and the value of apartment brands. Considering this, NH Investment & Securities explains that the possibility of a real estate market contraction until next year's presidential election is low, and even if it contracts, Hyundai Construction is expected to be less affected compared to other construction companies.

Third-quarter sales are also expected to increase by about 15% year-on-year to approximately 4.6 trillion won, and operating profit is projected to expand by 68% to record 234.8 billion won. However, on a separate basis, sales performance is expected to be 21,000 households, which is 4,000 households less than the target. Nevertheless, with delayed projects being sold this month, achieving the annual target (32,000 households) does not seem difficult.

Researcher Minjae Lee of NH Investment & Securities analyzed, "Considering the current valuation of Samsung Engineering, the goal of listing Hyundai Engineering is not an unreasonable level," adding, "Although overseas orders have been disappointing compared to plans due to COVID-19, this situation could be advantageous in terms of performance stability."