Corporate Logo(source: hdec.kr)
KB Securities recommended Hyundai Engineering & Construction(000720) as its top pick for the first half of the year, expecting improved performance. The firm maintained its "BUY" rating on Hyundai Engineering & Construction and raised the target price from 41,000 won to 45,500 won. The stock closed at 35,900 won on the previous day.
Jang Mun-jun, an analyst at KB Securities, noted, “After the earnings shock in January and the aggressive guidance presented by the company, Hyundai Engineering & Construction’s stock has risen by more than 30%. While the significant decline following the impeachment phase has been somewhat recovered, given the recent stock price increase, sustained investment is necessary to manage the ‘upside risk,’ which refers to the risk of not holding the stock as its price rises.”
KB Securities analyzed that the company’s stock is likely to react sensitively to news regarding nuclear power business, the potential end of the war in Ukraine and subsequent reconstruction efforts, and the possibility of improved relations with North Korea in the first half of this year.
In particular, the company is expected to benefit from developments in both traditional large-scale nuclear power plants and small modular reactors(SMRs). Jang highlighted that Hyundai Engineering & Construction is creating a solid foundation for continuous orders through collaboration with global companies in both traditional nuclear power plants and next-generation SMRs.
He explained that "the key to traditional large-scale nuclear power plants is collaboration with Westinghouse," adding that Hyundai Engineering & Construction is expected to complete the second-phase design, procurement, and construction(EPC) transition for Units 7 and 8 of the Kozloduy Nuclear Power Plant in Bulgaria this year. Last month, the company also jointly won the feasibility study for the second unit of the Krško Nuclear Power Plant in Slovenia.
Jang also pointed out that Hyundai Engineering & Construction, in partnership with Holtec, plans to start construction on a 3.5th generation SMR project at the Pelisade Nuclear Power site within this year. “Holtec is better known as a waste and maintenance company, but it has secured a site that was previously used for nuclear power plants. The 3.5th generation SMR project is advantageous from a licensing perspective," he explained. “Hyundai Engineering & Construction’s construction and financial support will likely back this project.”
While Jang lowered the earnings expectations for the first quarter and full year due to potential costs arising from incidents at affiliated companies, he emphasized that the overall positive momentum remains unchanged and reaffirmed Hyundai Engineering & Construction as the top sector pick for the first half of the year.
*[KOSPI]Hyundai Engineering & Construction(000720) is the second-ranked comprehensive construction company in the 2022 Construction Capability Evaluation, responsible for civil engineering sectors such as tunnels, bridges, road construction, land development, and steel structure production and installation, as well as the construction/housing sector, including public buildings and high-rise buildings, apartments, etc. Market capitalization is 3.9977 trillion won(as of March 10, 2025, closing price).
Corporate Logo(source: hdec.kr)
KB Securities recommended Hyundai Engineering & Construction(000720) as its top pick for the first half of the year, expecting improved performance. The firm maintained its "BUY" rating on Hyundai Engineering & Construction and raised the target price from 41,000 won to 45,500 won. The stock closed at 35,900 won on the previous day.
Jang Mun-jun, an analyst at KB Securities, noted, “After the earnings shock in January and the aggressive guidance presented by the company, Hyundai Engineering & Construction’s stock has risen by more than 30%. While the significant decline following the impeachment phase has been somewhat recovered, given the recent stock price increase, sustained investment is necessary to manage the ‘upside risk,’ which refers to the risk of not holding the stock as its price rises.”
KB Securities analyzed that the company’s stock is likely to react sensitively to news regarding nuclear power business, the potential end of the war in Ukraine and subsequent reconstruction efforts, and the possibility of improved relations with North Korea in the first half of this year.
In particular, the company is expected to benefit from developments in both traditional large-scale nuclear power plants and small modular reactors(SMRs). Jang highlighted that Hyundai Engineering & Construction is creating a solid foundation for continuous orders through collaboration with global companies in both traditional nuclear power plants and next-generation SMRs.
He explained that "the key to traditional large-scale nuclear power plants is collaboration with Westinghouse," adding that Hyundai Engineering & Construction is expected to complete the second-phase design, procurement, and construction(EPC) transition for Units 7 and 8 of the Kozloduy Nuclear Power Plant in Bulgaria this year. Last month, the company also jointly won the feasibility study for the second unit of the Krško Nuclear Power Plant in Slovenia.
Jang also pointed out that Hyundai Engineering & Construction, in partnership with Holtec, plans to start construction on a 3.5th generation SMR project at the Pelisade Nuclear Power site within this year. “Holtec is better known as a waste and maintenance company, but it has secured a site that was previously used for nuclear power plants. The 3.5th generation SMR project is advantageous from a licensing perspective," he explained. “Hyundai Engineering & Construction’s construction and financial support will likely back this project.”
While Jang lowered the earnings expectations for the first quarter and full year due to potential costs arising from incidents at affiliated companies, he emphasized that the overall positive momentum remains unchanged and reaffirmed Hyundai Engineering & Construction as the top sector pick for the first half of the year.
*[KOSPI]Hyundai Engineering & Construction(000720) is the second-ranked comprehensive construction company in the 2022 Construction Capability Evaluation, responsible for civil engineering sectors such as tunnels, bridges, road construction, land development, and steel structure production and installation, as well as the construction/housing sector, including public buildings and high-rise buildings, apartments, etc. Market capitalization is 3.9977 trillion won(as of March 10, 2025, closing price).