[Click eStock] "Government Expands Housing Supply... Small and Medium Construction Firms Benefit, 'Halla' Top Pick"

[Asia Economy Reporter Ji-hwan Park] Meritz Securities evaluated on the 27th that Halla is highlighted as one of the small and medium-sized construction companies with construction cost competitiveness benefiting from the government's housing supply expansion policy in 2022.

Researcher Hyung-ryeol Park of Meritz Securities stated, "The actual groundbreaking of the housing supply policies, which have been actively announced since last year, is expected to take place from 2022 onward," adding, "This is because the announced 3rd New Town and additional supply policies go through processes such as land compensation, permits, and new land sales, causing a time lag until actual sales occur. It is analyzed that a substantial increase in supply volume is possible in 2022, centered on some New Towns where pre-subscription has already begun. In the phase of public-led supply expansion, small and medium-sized construction companies with construction cost competitiveness are expected to benefit.

The announcement of shareholder value enhancement policies is also positive. On the 13th, a plan was disclosed to enhance shareholder value by canceling 1,016,000 existing treasury shares, purchasing and canceling 820,000 convertible preferred shares, and repurchasing, canceling treasury shares, and paying dividends within 40% of net income. Researcher Park said, "Concerns about dilution of the excessively large 10.17 million convertible preferred shares (held by Halla Holdings) are reduced, and there is a high possibility that direct shareholder value enhancement measures such as common stock repurchase and cancellation will be implemented in the long term."

This year, sales are expected to reach 1.5 trillion KRW, and operating profit is expected to be 102.9 billion KRW. Next year, due to increased housing sales, expansion of independent projects, and continued high profitability in the housing sector, sales are estimated at 1.7 trillion KRW and operating profit at 142.1 billion KRW. The operating profit growth rate is projected at 38%. Researcher Park stated, "The expected improvement in performance is significant as the expansion of net profit serves as the source for shareholder value enhancement strategies."

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