[Click eStock] "Hyundai Construction Equipment, More Regions to Recover in Second Half... Target Price Up"

[Asia Economy Reporter Eunmo Koo] Shin Young Securities has raised the target price for Hyundai Construction Equipment from 26,000 KRW to 28,000 KRW, stating that more regions are expected to recover in the second half of the year compared to the second quarter.

Hyundai Construction Equipment recorded sales of 668.4 billion KRW in the second quarter of this year, a 20.5% decrease compared to the same period last year, and operating profit decreased by 16.7% to 42 billion KRW. Researcher Kyungah Eom of Shin Young Securities explained in a report on the 30th, “The market’s operating profit estimate was in the 10 billion KRW range, but due to a reduction in provisions compared to last year and the normalization of the utilization rate of the Chinese subsidiary, which has a significant impact on profits and losses, the company achieved profits that greatly exceeded expectations.” The profit increase effect from the Jiangsu subsidiary in China corresponds to about 12.5 billion KRW compared to the previous quarter.

The second half of the year is expected to see more regions recovering compared to the second quarter. Researcher Eom predicted, “While the second quarter showed negative growth in all regions except China, most regions except the Indian and U.S. markets are expected to show recovery in the third quarter.” Nevertheless, due to sluggish sales in the first half, which is the peak season, the annual sales for this year are estimated to be 2.5595 trillion KRW, a 10.3% decrease from last year.

The investment opinion remains ‘Buy,’ and the target price has been raised to 28,000 KRW. Researcher Eom explained, “Despite most companies facing decreased sales and other fixed cost burdens due to the impact of COVID-19, Hyundai Construction Equipment has the advantage of maintaining a relatively stable financial structure. Additionally, with natural disasters occurring in the China region, mid-term infrastructure investment is expected to increase, providing ample growth potential.”

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