Hyundai E&C: 2023 overseas enterprise expectations stay unchanged | All Tech Sir

The creator is an analyst at NH Funding & Securities. He might be reached at — Ed.

Hyundai E&C 4Q22 OP is predicted to fall in need of consensus because of value burden. Nevertheless, in 2023 overseas enterprise is forecast to broaden, specializing in Saudi Arabia’s NEOM undertaking and NPP tasks in Jap Europe and the Center East.

The bearish components widespread to all Korean building corporations can’t be prevented

We preserve our Purchase ranking on Hyundai E&C, however decrease our TP from W50,000 to W48,000. Whereas it’s troublesome to keep away from a rise within the expense ratio as a result of deterioration of the actual property market since 2H, which has affected all friends, Hyundai E&C ought to be capable to partially offset such detrimental outcomes by Saudi Arabia’s NEOM undertaking and nuclear energy (NPP) tasks. in Jap Europe and the Center East. Our decreased TP revision is because of Hyundai Engineering’s drop in OTC costs.

Building corporations are anticipated to be conservative of their estimates for 2023. condo pre-sale targets, reflecting deteriorating actual property market circumstances and sluggish 2022 pre-sale outcomes. In 2023, as the price of building supplies and labor proceed to rise, the fee ratio within the housing division is predicted to deteriorate.

Nevertheless, Hyundai E&C is predicted to have the ability to make up for the sluggishness of its home housing division with abroad tasks. With the strengthening of cooperation with KEPCO and Westinghouse, AE tasks, that are rising primarily in Jap Europe and the Center East, along with the NEOM undertaking in Saudi Arabia, needs to be on the heart of Hyundai’s E&C orders overseas. We notice that the Baraka NPP undertaking within the UAE has outperformed different civil engineering and plant tasks in all features, together with the quantity of recent orders and profitability.

4Q22 outlook: just like different building corporations

On a consolidated foundation, it’s predicted that Hyundai E&C’s 4th quarter gross sales will attain 5.2 thousand W (-0.3% yy) and OP 164 bln. W (-26% yy), each numbers will fail to agree because of will increase in labor and materials prices. 3Q22. As Hyundai E&C has expertise in rising housing contract quantities by altering contracts with builders, the impression of value points needs to be minimal. Nevertheless, as costs proceed to rise and the actual property market continues to deteriorate, Hyundai E&C’s earnings development is predicted to comply with that of different building corporations over time.

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