[Click eStock] HDC Hyundai Development Company, the Biggest Beneficiary of Seoul Real Estate Price Increase

Increase in Order Backlog Centered on Seoul and the Metropolitan Area
Historical Stock Prices Coupled with Apartment Sale Prices
Stock Price Expected to Rise Due to Improved Performance and Real Estate Market Uptrend

KB Securities analyzed HDC Hyundai Development Company as the firm that can most significantly benefit from the differentiated price increase in Seoul real estate. They maintained a 'Buy' investment rating and a target price of 28,000 KRW. The previous closing price of HDC Hyundai Development Company was 17,440 KRW.

Researchers Jang Moon-jun and Kang Min-chang from KB Securities stated, "This recommendation is based on the strong Seoul real estate market and the increase in the company's own project order backlog," adding, "HDC Hyundai Development Company currently holds an order backlog of over 10 trillion KRW in its own projects and is expected to directly benefit from the differentiated price strength in the Seoul real estate market."

In particular, with the architectural review approval for the Gwangwoon University station area project, the commencement of construction and sales in September are becoming visible, raising expectations for the full-scale monetization of the order backlog. This is analyzed to have a positive impact on HDC Hyundai Development Company's stock price increase.

The two researchers noted, "The stock price increase of the former Hyundai Development Company in 2014-2015 coincided with the recovery of the real estate market and the rise in apartment sale prices," and added, "Unlike general comprehensive construction companies focusing on contracting and maintenance projects, HDC Hyundai Development Company has a high proportion of its own projects, allowing it to directly benefit from real estate price increases." This led to synchronization between the company's stock price and apartment sale prices.

Currently, the price increase in Seoul real estate is spreading to the metropolitan area. HDC Hyundai Development Company holds an order backlog of over 10 trillion KRW in its own projects centered in Seoul and the metropolitan area, making it the company expected to benefit the most. Even if the real estate price increase is not nationwide, if the sale and pre-sale prices centered in Seoul and the metropolitan area continue to rise, the scale of the order backlog will naturally increase. This is expected to lead to growth in future sales and profits.

Major projects of HDC Hyundai Development Company are also scheduled to commence construction sequentially. In addition to the Gwangwoon University station area project, complex development projects worth over 4.2 trillion KRW in Seoul and the metropolitan area, including the Yongsan Railroad Hospital site, Jamsil Sports/MICE, and Cheongna Medical Complex Town, are preparing to start construction from the end of 2024 through 2026. These projects are expected to further accelerate the company's external growth.

Researchers Jang Moon-jun and Kang Min-chang said, "HDC Hyundai Development Company serves as a proxy for the Seoul real estate market, and now is the right time for active buying," adding, "With the company's performance improvement and the strength of the Seoul real estate market, an increase in HDC Hyundai Development Company's stock price is expected."