"Rising Expectations for Participation in U.S. Nuclear Projects"—Hyundai Engineering and Construction Target Price Raised

[Financial News] On the 16th, iM Securities maintained its 'Buy' rating on Hyundai Engineering and Construction, citing expectations that it will win U.S. nuclear power contracts, while raising its target price from 150,000 won to 175,000 won.
Bae Se-ho, an analyst at iM Securities, forecast, "Given financial support from the United States Department of Energy (DOE), letters of intent (LOIs) with Westinghouse Electric Company and potential partners, and the possibility of investment by South Korea in the United States, nuclear power projects in the United States are highly likely to take shape soon. The visibility of Hyundai Engineering and Construction's participation in U.S. nuclear projects will also become clearer."
He added, "Hyundai Engineering and Construction has a strategic partnership with Westinghouse Electric Company and is a key engineering, procurement and construction (EPC) member of Korea Hydro & Nuclear Power's (KHNP) Team Korea, making its participation in large-scale U.S. nuclear power projects highly likely."
The United States is pursuing large-scale nuclear power plant construction to meet surging electricity demand driven by the spread of artificial intelligence (AI). In October last year, the U.S. government formed a partnership with Westinghouse Electric Company's shareholders to build nuclear power plants worth $80 billion in the United States.
iM Securities also expected Holtec International's initial public offering (IPO), scheduled for the second half of the year, to have a positive impact on Hyundai Engineering and Construction's share price. Bae explained, "The competitiveness of Hyundai Engineering and Construction, which holds exclusive EPC rights for Holtec International's global projects, could come into focus. Hyundai Engineering and Construction is expected to handle EPC work for the two projects being pursued by Holtec International, and a partial EPC contract for the Palisades Nuclear Plant could be secured within the year."
Regarding its core business, he noted, "Stable earnings are expected, supported by a recovery in housing-sector margins and an expansion in scale from next year onward. The company recorded an improved housing cost ratio in the second quarter, and a housing margin at around 90% can be sufficiently expected over the medium to long term as revenue from high-cost sites declines."
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