[Featured Stock] HDC Hyundai Development Company Jumps Over 5% on Profit Margin Improvement Hopes

The share price of HDC Hyundai Development Company is showing a rise of over 5% on expectations of improved profit margins.

As of 2:26 p.m. on the 9th, HDC Hyundai Development Company was trading at 22,000 won, up 1,100 won (5.26%) from the previous trading day.

On this day, IBK Investment & Securities maintained its "buy" investment rating on HDC Hyundai Development Company and raised its target price to 35,000 won.

Cho Junghyun, an analyst at IBK Investment & Securities, said, "The most notable aspect of HDC Hyundai Development Company is its profitability. The gross profit margin of the Gwangwoon University Station Area development project, which accounted for about 45% of in-house segment sales in the fourth quarter of last year, was 40.4%," adding, "We believe that major in-house projects currently underway, such as Gagyeong 6 and Seosan Central, are also highly likely to post a similar level of gross profit margin."

Cho added, "Operating profit in the fourth quarter of last year was 41.3 billion won, falling short of expectations, and at some sites, selling, general and administrative expenses increased by about 100 billion won year-on-year due to bad-debt write-offs of construction receivables, which reduced earnings," but went on to say, "It is more reasonable to interpret the issue of construction receivables amortization not as a source of ongoing concern but as a preemptive cleanup of non-performing assets, and through this, earnings volatility is likely to decline in future quarters."

He continued, "Considering the possibility that the receivables collection cycle will resume in line with the peak seasons for pre-sales and move-ins, we believe there is room for a reduction in borrowing burdens and a consequent upward revision of EPS."

This content was produced with the assistance of AI translation services.