KB Securities named Hyundai E&C as the preferred stock for nuclear power and stated on 1st that the valuation upper limit must be redefined. The growth of the nuclear power industry has necessitated a re-rating. Accordingly, the target stock price has been raised by 17% from the previous 94,000 won to 110,000 won, and the investment opinion remains 'buy'.
Jang Moon-jun, a researcher at KB Securities, noted, "Hyundai E&C's past value peak has been determined by the market size of core businesses that the market focused on at various times," adding, "The core business currently attracting attention is 'nuclear power'."
The periods when Hyundai E&C's value was overvalued include the Middle Eastern plant boom from 2011 to 2012, discussions on inter-Korean economic cooperation in 2018, and the housing distribution boom in 2021. With the exception of the Middle Eastern plant boom, all were positive factors confined to the domestic market. The Middle East represents an expansion into overseas markets, but is assessed to have been limited to regional constraints.
However, the situation is different for nuclear power. The nuclear power market is expanding, primarily in the United States and Europe, and the required level of technology is also high. In particular, nuclear power Engineering, Procurement, and Construction (EPC) must possess high technical capabilities, the ability to respond to complex regulations, and international credibility to enter the market. While the market size has grown, the number of competitors has actually decreased.
Researcher Jang commented, "The fact that Hyundai E&C's stock price has entered a forward price-to-book ratio (PBR) of 1.0 signifies that the market has started to look beyond the existing valuation criteria to a new standard," adding, "As the market size and structure change, so too will the valuation benchmarks, and this is the turning point."