[Click eStock] "Hyundai Construction, Beneficiary of Regime Change"

[Asia Economy Reporter Kwon Jae-hee] Daishin Securities maintained a 'Buy' rating on Hyundai Engineering & Construction on the 11th, setting a target price of 75,000 KRW.

This is due to expectations of a revival of the past boom period driven by oil price recovery, increased policy-driven housing supply, and optimism in the nuclear power industry.

The most representative factor is the reconstruction expectations following the regime change. Yoon Seok-yeol, the People Power Party candidate, was elected as the 20th president. President-elect Yoon diagnosed that the current administration's real estate policy failure was due to excessive regulations focused only on suppressing demand while neglecting supply. To address this, he promised large-scale housing supply and deregulation of real estate, including reconstruction.

President-elect Yoon pledged to supply 2.5 million housing units nationwide over the next five years. The supply in the metropolitan area is expected to be 1.3 to 1.5 million units, including 1.42 million units from public land development and 470,000 units from redevelopment and reconstruction. Regarding reconstruction, he also announced plans to rationally adjust safety inspection standards. Among the safety inspection items, the weight of structural stability, which accounts for 50%, is proposed to be lowered to 30%, while the weight of residential environment is to be increased from 15% to 30%. A redevelopment law for the first-generation new towns is also planned. Accordingly, with increased housing supply and deregulation movements following the regime change, investment sentiment in construction stocks is expected to recover.

Hyundai Engineering & Construction's order performance last year was 30 trillion KRW, and its order backlog was 79 trillion KRW, representing increases of 12% and 21% respectively compared to the previous year.

Lee Dong-heon, a researcher at Daishin Securities, analyzed, "Hyundai Engineering & Construction has emerged as a leader in redevelopment projects based on quality and brand," adding, "It operates across all sectors including domestic housing, nuclear power, and wind power, highlighting its appeal as a leading stock at the turning point of the construction industry."

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