Kiwoom Securities announced on November 2 that concerns over low-cost contracts in the nuclear power market are leading to pressure on construction margins for Hyundai Engineering, resulting in a recent decline in its stock price. The firm has lowered its target price for Hyundai Engineering to 146,000 won. However, it maintained a 'buy' rating, citing potential stock price recovery if future nuclear contracts and profitability in the plant sector improve.
Shin Dae-hyun, a researcher at Kiwoom Securities, stated in a report that uncertainties still exist regarding Hyundai Engineering's performance for the year. He noted that the company has incurred significant one-time costs in two consecutive quarters in civil engineering, leaving future profitability uncertain.
Shin also pointed out that uncertainties remain in the plant sector. He explained that while negotiations for the settlement at the Shahin site are ongoing, there are still uncertainties regarding the timing and the possibility of additional costs.
Nevertheless, he projected that strong profitability in construction and housing, along with increased revenues from urban redevelopment and data centers, would likely lead to profit growth in 2027.
Shin emphasized the need to recognize Hyundai Engineering's competitiveness in the global nuclear power market. He remarked that the recent failure of negotiations between Korea Hydro & Nuclear Power and Daewoo Engineering & Construction for the Dukovany project in the Czech Republic highlights the importance of securing competitive contractors in the nuclear market. He noted that Hyundai Engineering's solid position as a contractor in the global nuclear market should be underscored.
* This article has been translated by AI.
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