Under the Shadow of a Weak Construction Market... Hyundai Livart Cuts Target Price 19.2% [Click e-Stock]
Mirae Asset Securities Maintains “Neutral” Rating
Mirae Asset Securities said on November 3 that it had lowered its target price for Hyundai Livart, a furniture specialist, by 19.2% from 7,800 won to 6,300 won, while maintaining its “Neutral” rating. The new target price implies 19.3% upside from the share price of 5,280 won as of November 2.
“With the recovery in the construction industry, a key end market, still delayed, we believe it remains difficult to expect any meaningful catalyst for a share price rebound,” said Kim Kiryong, an analyst at Mirae Asset Securities. “We also believe that overseas temporary construction contracts, which previously drove the share price higher, are unlikely to deliver visible results in the short term.”
Hyundai Livart posted consolidated revenue of 333.6 billion won in the third quarter, down 2.1% from a year earlier, and recorded an operating loss of 900 million won, turning to a loss. Its pretax loss was 5.8 billion won, reflecting foreign-exchange valuation losses caused by the decline in exchange rates.
Analyst Kim said the decline in revenue increased the burden of fixed costs, while lower sales in key business divisions worsened the business mix, contributing to weak earnings. Sales of furniture to consumers (B2C) and businesses (B2B) fell 18% and 12%, respectively, due to a slowdown in new housing presales, fewer move-ins, and weaker consumer sentiment. “A delayed recovery in B2B furniture sales is inevitable, given the decline in new housing presales and move-ins that has continued since 2023,” Kim added.
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Mirae Asset Securities estimated that Hyundai Livart’s revenue this year would fall 7.4% to 1.431 trillion won, while operating profit would drop 55.7% to just 7 billion won. This is below the market consensus of 13 billion won. Operating profit is projected to increase 94.2% to 14 billion won next year.
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