[Click eStock] "Hyundai Construction's 4Q Last Year Performance Falls Short of Expectations... Order Growth Expected Next Year"

[Asia Economy Reporter Oh Ju-yeon] Hanwha Investment & Securities analyzed on the 10th that Hyundai Construction's operating profit for the fourth quarter of last year is expected to fall short of market expectations. However, it stated that both performance improvement and order growth are expected this year, and the stock price level is also low, maintaining its top pick opinion within the industry.

Hyundai Construction's consolidated fourth-quarter sales are estimated at 4.4 trillion KRW, down 2.4% year-on-year, and operating profit is estimated at 206.9 billion KRW, up 27.1% year-on-year. This is 13.5% lower than the market consensus operating profit of 239.3 billion KRW.

Researcher Song Yu-rim explained, "Total sales are unlikely to have difficulty achieving the guidance (consolidated 17 trillion KRW) presented at the beginning of the year, but the improvement in the cost ratio of the overseas division appeared slower than expected, making it difficult to achieve the operating profit target of 1 trillion KRW set at the beginning of the year."

However, a relay of orders is expected this year.

Researcher Song Yu-rim said, "On the 2nd, they announced the first overseas order news of 2020 (Qatar building, 613 billion KRW), signaling a pleasant start," adding, "Hyundai Construction (separate) plans about 4 trillion KRW in overseas orders in the first quarter alone, and in the second quarter, large projects such as Saudi Zafra (3 Pkgs, 3.7 billion USD) and Qatar LNG (total 16 billion USD) are scheduled to be ordered." She continued, "Considering the improvement in the overseas ordering market, the company's stance on this, and the abundant order pipeline, it is necessary to continue expectations for overseas orders in 2020."

Researcher Song maintained a 'Buy' investment opinion on Hyundai Construction and lowered the target price from 68,000 KRW to 63,000 KRW, reflecting the expectation that 2020 sales growth will be slower than anticipated.

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