[Click eStock] "HDC Hyunsan, Unchanged Top Pick... Target Price Maintained"

On the 22nd, KB Securities maintained its buy rating and target price of 28,000 KRW for HDC Hyundai Development Company, describing it as "a company expected to experience mid-term profit growth and simultaneously the fastest to leap as a developer at the structural turning point of the Korean real estate industry."

Researchers Jang Moon-jun and Kang Min-chan of KB Securities stated, "As the groundbreaking for the Gwangwoon University Station area project, which will bring both profit growth and business model transformation, approaches, it is time for active buying rather than waiting. We continue to recommend it as our top pick."

The Gwangwoon University Station area project, scheduled to break ground in September with a scale of 4.5 trillion KRW, is planned to proceed in a mixed form of development and operation. Researchers Jang Moon-jun and Kang Min-chan explained, "Through this, the company will secure operational assets (rental housing, commercial facilities, offices, hotels) worth more than 1.5 trillion KRW (undecided in detail)," adding, "and subsequently, complex development projects in Seoul and the metropolitan area exceeding 4.2 trillion KRW, including the Yongsan Railroad Hospital site, Jamsil Sports & MICE, and Cheongna Medical Complex Town, are being prepared for groundbreaking in 2025-2026."

They further emphasized, "Around the year 2000, Japan's national land and residential development policies underwent significant changes. The era focused on nationwide development and volume supply has ended, and under the rationale of efficiently responding to low growth and aging, content and sustainability have become important in real estate development." They added, "It is important to remember that the growth and stock price differentiation of developers such as Mitsui Fudosan and Sumitomo Realty & Development coincided with changes in policy and development models."

Additionally, they noted, "The time has come for a paradigm shift in real estate development in Korea as well. The current Korean real estate development model, which focuses on short-term capital gains based on leverage effects, has proven to be very vulnerable during economic downturns, as confirmed twice in just 15 years." They added, "As low growth and aging rapidly solidify, the new challenge for Korean real estate players will be whether they can create a sustainable urban development model, just like in Japan."