[Click eStock] Hyundai Construction, Clearing Old Overseas Losses in Last Year's 4Q

[Asia Economy Reporter Junho Hwang] Ebest Securities maintained the target price of Hyundai Engineering & Construction at 74,000 KRW on the 6th.

Ebest Securities projected Hyundai Engineering & Construction's Q4 sales last year to be 4.9681 trillion KRW, a 14.9% increase compared to the same period last year, in line with consensus. Operating profit was estimated at 191.5 billion KRW, a 23.6% decrease compared to the consensus operating profit of 250.7 billion KRW.

Additionally, the 80 billion KRW provision for the Singapore bond call in Q2 is expected to be ultimately reversed, but further cost recognition is anticipated due to prolonged settlements and construction delays. Furthermore, the UAE Mirfa desalination combined cycle power plant site, which had provision risk due to prolonged final settlements, is also expected to reflect additional provisions this quarter.

Moreover, with the listing of Hyundai Engineering, an unexpected large volume of old share sales is expected to occur. Although Hyundai Engineering, expected to be listed in the 4 to 6 trillion KRW band, may negatively affect Hyundai Engineering & Construction in the short-term supply-demand aspect, the risk of corporate mergers and other risks that have long suppressed the stock price due to old share sales can be alleviated.

Researcher Seryeon Kim of Ebest Securities stated, "The expansion of the subsidiary's corporate value can fully act as an alpha factor in the parent company's valuation," maintaining a buy rating.

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