[Click eStock] "Hyundai Construction, Focus on 'Developer' Transition... Target Price Maintained"

Hyundai Construction's 2030 Strategy and Portfolio Expansion
Major Projects Awaiting Including Bokjeong Station Area and Hilton Hotel
Development Profits to Be Fully Realized from 2026

Hana Securities maintained a 'Buy' rating and a target price of 40,000 KRW for Hyundai Engineering & Construction on the 12th, highlighting the possibility of its transition to a 'developer.' A developer refers to a company that handles both construction and project implementation. Hyundai Engineering & Construction's closing price on the previous trading day was 29,950 KRW.

Researchers Seungjun Kim and Minho Ha from Hana Securities stated, "As part of its 2030 strategy, Hyundai Engineering & Construction emphasizes portfolio expansion and aims to transition into a developer focused on planning services and content." They added, "Currently, the company is conducting its business by sharing development profits through equity investments. Representative projects include CJ Gayang site, Bokjeong Station area, Hilton Hotel, Yongsan Crown Hotel, and Emart site." There are a total of 21 such investment development projects. The total construction cost is expected to reach approximately 10 trillion KRW. Hyundai Engineering & Construction anticipates annual sales exceeding 2 trillion KRW from these investment development projects starting in 2026.

One of the most notable projects is the Bokjeong Station area development. This project covers a land area of 66,000 pyeong and a total floor area of 506,000 pyeong, planned to include 293,300 pyeong of office space, 81,000 pyeong of knowledge industry centers, 80,000 pyeong of officetels, 38,000 pyeong of retail facilities, and 12,000 pyeong of lodging facilities. The office area of 293,000 pyeong is larger than Roppongi Hills Mori Tower (229,000 pyeong) and Azabudai Hills Mori Tower (261,000 pyeong), and its scale can be appreciated when compared to IFC (153,000 pyeong). The land cost alone amounts to 3.2 trillion KRW, with the total project cost expected to exceed 10 trillion KRW. Hyundai Engineering & Construction holds a 29.6% stake and plans to commence construction in January 2026, aiming for completion in September 2029.

The Hilton Hotel project is planned on a land area of 5,700 pyeong with a total floor area of 104,000 pyeong. It will consist of 80,000 pyeong of office space and 19,000 pyeong of hotel space, boasting the largest single office building area in Seoul. The floor area per level is 1,140 pyeong, nearly twice the size of Park One (550 pyeong), IFC (530 pyeong), and Samsung Electronics Seocho building (520 pyeong). The hotel acquisition was completed at approximately 1.1 trillion KRW, with demolition scheduled for December 2024 and completion targeted for the first half of 2029.

Researchers Seungjun Kim and Minho Ha said, "The target price was calculated by applying a target price-to-earnings ratio (P/E) of 9.0 times to the estimated earnings per share (EPS) for 2024." They added, "The full-scale profit realization from development projects is expected to begin in 2026. Although the current impact of development value on the stock price may be limited, if these limiting factors and the improvement in profit sluggishness are confirmed, Hyundai Engineering & Construction’s stock price has significant upside potential."

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