[Click eStock] "Hyundai Construction, Should Use One-Time Shock as a Buying Opportunity"

[Asia Economy Reporter Minji Lee] Daishin Securities maintained its buy rating and target price of 75,000 KRW for Hyundai Construction on the 26th. Although one-time profits decreased, the increase in orders expected in the second half of the year makes buying valid.

Second-quarter earnings recorded sales of 4.3835 trillion KRW and operating profit of 141 billion KRW, down 4% and 8% respectively compared to the same period last year. Sales were about 3% below market expectations, and operating profit was about 37% below.

Domestic segment sales grew 5% year-on-year to 3.0363 trillion KRW due to an increase in order backlog. Overseas segment sales decreased 19% year-on-year to 1.3472 trillion KRW. This decline was due to the completion of major construction projects and timing effects.

Operating profit recorded a one-time overseas bond call loss of 80.9 billion KRW, resulting in earnings below market expectations. Daishin Securities analyst Dongheon Lee explained, “This is a special case and may be reversed later,” adding, “Excluding one-time items, operating profit was 221.9 billion KRW, in line with consensus.”

New orders in the second quarter increased to 11.5 trillion KRW, expanding the order backlog to 75.6 trillion KRW. The construction and housing sectors increased to 5.5 trillion KRW, and the HEC sector to 4.7 trillion KRW. The cumulative orders for the first half reached 18.4 trillion KRW, achieving about 72.4% of the annual target of 25.4 trillion KRW.

Analyst Dongheon Lee said, “Domestic orders in the first half reached 14.5 trillion KRW, already exceeding the annual target of 14.3 trillion KRW,” and added, “Overseas orders were 3.8 trillion KRW, about 34.6% of the annual target of 11.1 trillion KRW, so large orders are expected in the second half.”

Both domestic and overseas orders are expected to perform well in the second half. Analyst Lee explained, “Considering the stabilization of overseas segment costs, increase in orders, and improvement in earnings trend, the one-time shock is a buying opportunity.”

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