[Click e-Stock] Construction Firm Showing Clear Profit Improvement Yet Facing Extreme Undervaluation

Hanwha Investment & Securities has maintained its “Buy” rating on HL D&I, keeping the target share price at 5,500 won.

On September 29, Hanwha Investment & Securities researcher Song Yurim stated, “HL D&I is expected to continue its stable earnings momentum in the third quarter of this year. Since performance improvements are ongoing, there are expectations for efforts to break away from a period of severe undervaluation, whether through growth or distribution.”

HL D&I’s sales for the third quarter of this year are projected to reach 457.9 billion won, a 4.0% decrease compared to the same period last year, while operating profit is expected to rise by 13.3% to 28.9 billion won. Song noted, “The civil engineering segment will see both sales and margin recover in the second half of this year, driven by the full-scale sales contributions from new sites, and the residential segment is also expected to maintain solid margins.”

Given the clear trend of earnings improvement, there are suggestions that new investment points such as shareholder returns are needed. Song pointed out, “While the medium-to-long-term growth momentum has weakened, considering the order intake results in the first half and the annual pre-sale plan, the construction market outlook remains solid, and with the current share price at an absolutely undervalued level, a range of upcoming events, both major and minor, could positively influence a recovery in the stock price.”

Song also predicted, “If additional self-driven projects, increased orders in non-residential sectors to secure new growth engines, or strengthened shareholder returns such as resuming common stock dividends or the purchase and cancellation of preferred shares are confirmed, a flexible rebound is possible.”

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