“Housing-sector earnings set to improve amid expected benefits from U.S. nuclear power” ... Hyundai Engineering and Construction target price: 170,000 won

[Financial News] NH Investment & Securities on the 7th set a target price of 170,000 won for Hyundai Engineering and Construction, with a ‘Buy’ rating, citing expected earnings improvement amid benefits from the U.S. nuclear power sector.
Lee Eun-sang, an analyst at NH Investment & Securities, noted that “the details of Hyundai Engineering and Construction’s participation in TerraPower’s first unit are expected to take shape within the year,” adding that “Hyundai Engineering and Construction is building construction partnerships with a number of U.S. reactor developers, including TerraPower, Holtec International and Westinghouse, covering both large-scale nuclear power plants and small modular reactors (SMRs).”
He added that “the likelihood of Hyundai Engineering and Construction being brought in as a replacement has increased further after the contract with Bechtel Corporation, the existing contractor for TerraPower’s first-unit project site, was terminated last month.” He said that “if Hyundai Engineering and Construction is brought in to replace a U.S. contractor, it would be an opportunity to reaffirm its competitiveness in the United States.”
He viewed it positively that, since construction at the site has already begun, an immediate project award and revenue recognition would be possible once the construction rights are confirmed.
He also highlighted the improvement in the housing division’s results, forecasting operating profit of 955 billion won this year and 1.1 trillion won next year.
Lee said that “the housing division’s gross profit margin (GPM) was 13% in the second quarter, even without one-off gains, thanks to an improved project mix as the number of high-cost sites declined.” He expected that “the earnings improvement will continue beyond next year, driven not only by the further run-off of high-cost sites but also by a higher share of negotiated contracts and the effects of higher presale prices.”

[email protected] Seo Min-ji Reporter