Hanshin Engineering & Construction, Proactive Risk Management and Independent Projects to Improve Performance Next Year

[Asia Economy Reporter Noh Kyung-jo] There is a forecast that Hanshin Engineering & Construction's performance will improve next year through proactive risk management and its own projects.

According to a report by researcher Lee Seon-il of BNK Investment & Securities on the 14th, Hanshin Engineering & Construction's sales in the third quarter of this year amounted to 250.2 billion KRW, a 23.1% decrease compared to the same period last year.

Researcher Lee cited the sharp rise in raw material prices such as cement amid the sluggish real estate market and the significant increase in selling and administrative expenses, including marketing costs to resolve the unsold risk of large apartment complexes like 'Pohang Hanshin The Hue Pentacity' (2,192 households), as the causes.

However, the researcher predicted that performance will improve from next year. This appears to reflect a high evaluation of the management strategy focused on proactive risk management. In the report, the researcher stated, "We succeeded in raising the sales rate of Pohang Hanshin The Hue Pentacity to 80% to resolve risks," and added, "The company recognizes profits according to the contract rate for its own projects. Therefore, performance momentum through its own projects is expected from next year."

Meanwhile, a buy rating with a target price of 15,000 KRW was presented for Hanshin Engineering & Construction. The researcher said, "The target price was slightly lowered reflecting the delay in the sales schedule of new housing projects and revenue recognition of own projects, as well as the sluggish market conditions," but added, "The price-to-earnings ratio (PER) and price-to-book ratio (PBR) based on next year's expected performance are only 2.4 times and 0.2 times respectively, indicating an all-time low valuation."

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