High-Rise Apartments Coming?…Hyundai Elevator Also Soaring High

[Asia Economy Reporter Ji Yeon-jin] The corporate value of Hyundai Elevator has been soaring since the beginning of this year. The stock price was boosted by expectations that housing supply would increase due to the current government's failure in real estate policy.

According to the Korea Exchange on the 5th, Hyundai Elevator rose to 57,600 KRW during the previous trading day, up 2.86% from the previous day, setting a new 52-week high. The company's stock price rose at the end of last year on the back of COVID-19 vaccine expectations, and it has jumped more than 26% over the past two months from last month to the day before.

Hyundai Elevator is the number one company in the domestic elevator manufacturing market with a market share of 39.9%. Due to its subsidiary Hyundai Asan (73.9% stake), it has been classified as a North Korea cooperation stock, which caused high stock price volatility in the past. However, the stock price increase this year has been driven by core business issues as the construction market recovers.

There are expectations that the expansion of supply policies due to soaring housing prices will boost elevator demand through domestic reconstruction and redevelopment benefits. In particular, replacement demand for the 1st and 2nd generation new towns is also coinciding.

In fact, the scale of domestic housing construction starts increased by 15.6% in the fourth quarter of last year and rose 13.1% in the first quarter of this year. Domestic elevator installations increased by 5.3% in the fourth quarter of last year, but surged 13.3% in the first quarter of this year, showing a larger increase.

Choi Jin-myung, a researcher at NH Investment & Securities, said, "Both the ruling and opposition parties have pledged to expand housing supply in the metropolitan area, so the increasing trend in housing construction starts and elevator installations is expected to continue," adding, "Most recent housing market indicators show patterns similar to those around 2005 when housing supply expanded, so the housing construction market and elevator demand are expected to continue increasing for the time being."

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