Korea Investment & Securities evaluated Hyundai E&C on the 30th, stating that in addition to securing contracts for power plants, an improvement in profits is also expected. In doing so, it maintained an investment opinion of 'Buy' and raised the target stock price by 50.8% from the previous level to 95,000 won. The closing price of Hyundai E&C on the previous trading day was 65,800 won.
Kang Kyung-tae, a researcher at Korea Investment & Securities, noted, "With the increase in overseas plant contracts and improvements in the sales mix of dwellings contributing to profit trends, there is an upward trend in profits as well," adding, "Construction stocks can surpass the price-to-book ratio (PBR) barrier of 1.0 now."
He continued, "Considering the large nuclear power and SMR (small modular reactor) projects scheduled for the end of this year and every year thereafter, the cycle of securing contracts for power plants centered around large nuclear power will continue to enhance the multiples of corporate value for construction stocks."
Korea Investment & Securities projected that Hyundai E&C's return on equity (ROE) will approach 10% starting in 2027 and will show an upward trend each year thereafter.
Researcher Kang stated, "Considering that the cost of capital (COE) is 9.2% at the current market interest rate, and the potential for an increase in shareholder return preferences, the target price-to-book ratio (PBR) of 1.18 times presented is not burdensome even if approached intrinsically."