[Click eStock] "HanmiGlobal Emerges as a Beneficiary of NEOM City... High-Tech High Growth Also Promising"

[Asia Economy Reporter Lee Myunghwan] Cape Investment & Securities analyzed on the 4th that HanmiGlobal is expected to benefit from Saudi Arabia's ongoing 'NEOM City' project.

The NEOM City project is a plan to build a futuristic city covering 26,500 km² near the Red Sea in northwestern Saudi Arabia, an area 44 times the size of Seoul. It consists of three projects: 'The Line,' an eco-friendly linear city 170 km long and 200 m wide; 'Oxagon,' an octagonal advanced industrial complex floating on the sea; and 'Trojena,' a mountain tourism complex. The total project cost amounts to 670 trillion KRW (approximately 500 billion USD).

Cape Investment & Securities analyzed that HanmiGlobal is one of the domestic small and medium-sized companies capable of securing large-scale orders related to NEOM City. This is because HanmiGlobal was ranked the 8th largest construction project management (PM) company worldwide last year, proving its global competitiveness. Based on this, it was also highlighted as a strength that HanmiGlobal has actually secured orders such as the 2.6 billion KRW comprehensive program management (e-PMO) for 'NEOM The Line,' part of the NEOM City project, and the 15.5 billion KRW Rosheen residential complex.

Cape Investment & Securities also noted the high growth of the high-tech division as noteworthy besides NEOM City. The order backlog of the high-tech division, which accounts for more than 30% of HanmiGlobal's PM sales, is growing at an annual rate of over 30%, and Cape Investment & Securities expects this trend to continue for at least 2 to 3 years. They also forecast solid growth across all business sectors if new overseas orders from Europe and Saudi Arabia are added in the future.

Cape Investment & Securities projected HanmiGlobal's consolidated sales for this year to increase by 27.6% year-on-year to 344.6 billion KRW, and operating profit to rise by 36.7% to 26.8 billion KRW. They analyzed that performance will grow thanks to the expansion of domestic PM projects focused on high-tech and improved profit margins. Despite uncertain macroeconomic conditions, orders are expected to continue due to the B2B (business-to-business) nature of the projects, which helps withstand the construction industry downturn. They also pointed out the expected benefit from the high exchange rate through the U.S. subsidiary OTAK.

Researcher Heo Seonjae of Cape Investment & Securities said, "When the Saudi Crown Prince visits Korea at the end of this year, the additional order status of domestic companies will become concrete, and the real selection process related to NEOM City will begin," adding, "It is necessary to increase interest in HanmiGlobal."