[Click eStock] "Big Announcement Imminent"... Growing Expectations for This Construction Stock

iM Securities has raised the target price of Hyundai Engineering & Construction from 150,000 won to 175,000 won. The investment opinion remains at Buy.

On September 17, Bae Seho, a researcher at iM Securities, stated, "The nuclear power momentum that drove share price gains earlier this year is strengthening again." He added, "Considering the U.S. Department of Energy's financial support, letters of intent (LOIs) for collaboration with companies such as Westinghouse, and the possibility of Korean investment in the U.S., there is a high likelihood that nuclear power plant projects in the U.S. will soon become concrete. In addition, Holtec's initial public offering (IPO) plans are also positive for Hyundai E&C's share price."

Bae continued, "The partnership with Westinghouse and Hyundai E&C’s essential design, procurement, and construction (EPC) roles as part of Korea Hydro & Nuclear Power’s Team Korea make the company's chances of participating in large-scale nuclear projects in the U.S. very high. Last year, to rebuild its nuclear industry, the U.S. formed a strategic partnership with Westinghouse, and this year the Department of Energy announced conditional financial support amounting to 17.5 billion dollars." He further noted, "This June, Westinghouse signed LOIs with seven potential partners whose sites have already been specified. If nuclear power investment becomes part of Korea’s investments in the U.S., project commencement speeds could become even faster."

Holtec’s preparations for a public listing in the second half of the year are also seen as advantageous. Bae stated, "Hyundai E&C’s competitiveness, as the holder of exclusive EPC rights in Holtec’s global business, will become more prominent. Holtec is aiming for commercial operation in the early 2030s for a 680MW nuclear plant at its Michigan site and is also planning a 1.36GW small modular reactor (SMR) project. Hyundai E&C is expected to handle the EPC for both."

The housing division’s margin is also recovering. Bae explained, "In the second quarter of this year, Hyundai E&C achieved a significantly improved housing cost ratio of 87% on a standalone basis, and in the mid-to-long term, a housing margin of around 90% is expected. Large-scale project starts such as the Magok The Grid (with a scale of 1.6 trillion won), the Hilton Hotel development (1.2 trillion won), and the Bokjeong station area development (2.7 trillion won) are expected to further increase the company’s scale."

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