[Click eStock] "Hyundai Construction, Bright Earnings Outlook Despite 4Q Earnings Shock"

Daishin Securities Report

[Asia Economy Reporter Minji Lee] Daishin Securities maintained a buy rating on Hyundai Construction on the 25th and raised the target price by 24% from the previous level to 56,000 KRW. Although the fourth-quarter earnings last year were lower than market expectations, considering the sharp increase in order volume, significant growth is expected this year.

Last year's fourth-quarter earnings recorded sales of 4.3254 trillion KRW, down 6% compared to the same period last year. Operating profit decreased by 47% to 89.9 billion KRW, about 38% below market expectations.

Researcher Dongheon Lee of Daishin Securities said, “The delay in major overseas projects affected sales and operating profit,” adding, “A total of 100 billion KRW was reflected in the earnings from Dubai (50 billion KRW), Qatar Lusail (20 billion KRW), and Kuwait LNG Terminal (20 billion KRW).” On an annual basis, this amounts to 230 billion KRW, some of which is expected to be reversed this year.

New orders last year increased by 12% year-on-year to 27.1 trillion KRW. The order backlog rose 18% to 66.7 trillion KRW. Researcher Lee stated, “Improvement in overseas segment performance is expected this year,” and added, “The one-time effects have been completed, and the stock price will be determined by showing improvements each quarter.”

This year is expected to mark the end of the profit decline trend that has continued since 2016. The order target is set at 25.4 trillion KRW, with 14.3 trillion KRW domestically and 11.1 trillion KRW overseas. Researcher Dongheon Lee explained, “Overseas, there are highly visible projects such as Qatar LNG, Kuwait Port, and Hong Kong Hospital,” and “The domestic sales target is 52,000 units, and market share is expected to expand due to low financing costs and brand power.”

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