[Click eStock] "Samsung E&A and DL E&C Set to Benefit from Post-Conflict Construction"

Hana: "Korean Construction Companies to Benefit from Iranian Reconstruction"

Hana Securities identified Samsung E&A and DL E&C as companies expected to benefit in the construction sector following the end of hostilities between the United States and Iran.

On June 16, Minho Ha, a researcher at Hana Securities, stated, "It appears that a draft memorandum of understanding for ending the conflict between the United States and Iran will be agreed upon over the weekend." He explained, "Key points include the end of hostilities, the partial lifting of frozen Iranian assets and sales restrictions, the presentation of an Iranian reconstruction plan worth at least 300 billion dollars, and the reopening of the strait within 30 days."

Ha drew attention to the inclusion of 'Iranian reconstruction' in the latest negotiations. He said, "The final negotiations are reportedly limited to the handling of enriched uranium, the lifting of sanctions, and the reconstruction of the Iranian economy." He added, "With the Iranian reconstruction plan now explicitly stated, not only can reconstruction of refineries and power plants be expected after the end of hostilities, but development of oil and gas fields is also anticipated."

He went on to say, "The opening of the market in Iran is expected to present significant order opportunities for domestic construction companies." He emphasized, "Companies capable of carrying out EPC projects in the Middle East, such as Samsung E&A, DL E&C, and Hyundai Engineering & Construction, could benefit."

During the end-of-conflict phase, he projected that these stocks could generate greater profits than top picks driven by earnings upgrades. Ha said, "For June, we recommend Samsung C&T, which is well-positioned for the ongoing semiconductor uptrend, and IS Dongseo, which is likely to see earnings estimates revised upward, as our top picks." However, he added, "If the end of hostilities is confirmed, we strongly recommend buying Samsung E&A and DL E&C."

Meanwhile, last week, the construction sector's return outperformed the KOSPI by 11.3 percentage points. Institutional investors bought Hyundai Engineering & Construction, Samsung E&A, and IS Dongseo, while selling Daewoo Engineering & Construction and DL E&C. Foreign investors bought GS Engineering & Construction and Daewoo Engineering & Construction, while selling Hyundai Engineering & Construction, Samsung E&A, DL E&C, and IS Dongseo.

This content was produced with the assistance of AI translation services.