KB Securities analyzed on the 2nd that the stock price of Hyundai E&C continues to decline as uncertainties in the construction market become more pronounced. It noted that investment sentiment is being suppressed as government policies, such as safety and lending regulations, are expected to be strengthened. The target stock price has been adjusted downward from the previous 110,000 won to 97,500 won, while maintaining a 'buy' investment opinion.
The stock price of Hyundai E&C showed rapid growth in the first half of this year, but has been on a decline since reaching an annual high of 85,100 won on June 25. This is due to an influx of profit-taking sell orders and an emphasis on uncertainties in the construction market in the second half of the year.
As a result, expectations for performance are also declining. KB Securities presented a revenue forecast of 30 trillion won and an operating profit of 793.3 billion won for Hyundai E&C this year. While an operating profit is expected to turn positive this year, it has been revised down by 12.9% compared to previous forecasts.
Jang Mun-jun, a researcher at KB Securities, analyzed, "The forecast for lowering annual profit guidance announced during the second quarter earnings report is one of the main reasons for the recent stock price decline," and added, "The more significant issue was that it raised uncertainties that the stock market dislikes rather than profit reductions."
However, despite the short-term uncertainties, the trend of improving performance in the medium to long term is still expected to continue. There remains potential for growth, as there is a possibility of securing more than 15 trillion won in new nuclear power projects by the first half of next year. A contract worth 4 trillion won is anticipated in the U.S. Palisade small modular reactor (SMR) project, and expectations are also building for securing contracts in the Bulgarian nuclear project.
Researcher Jang stated, "It is expected that the remaining contracts for nuclear power projects will increase by more than 15 trillion won," and emphasized, "As it is a corporation that can deliver results sooner than any other global nuclear power corporation, we maintain our top pick."