Hyundai Construction Stock, A Leader in the Construction Industry and a Growth Stock in New Businesses
Hyundai Construction Stock, A Leader in the Construction Industry and a Growth Stock in New Businesses
Hyundai Construction (000720) is a leader in the construction industry, operating various construction businesses such as housing, civil engineering, industrial, environmental, etc. It is also actively involved in new businesses such as overseas plant, marine/defense, hydrogen, etc. In this article, we will look at the advantages and prospects of Hyundai Construction stock.
Advantages of Hyundai Construction Stock
The advantages of Hyundai Construction stock are as follows.
- Competence as a leader in the construction industry: Hyundai Construction has high recognition and trust in the construction industry both domestically and internationally. Especially in the housing field, it presents luxury apartments with the Hillstate brand, and in the civil engineering field, it builds large-scale infrastructures such as highways, railways, ports, etc. In the industrial field, it constructs complex and precise facilities such as power plants, refineries, chemical plants, etc. In the environmental field, it designs, constructs, and operates eco-friendly facilities such as sewage treatment plants, waste treatment plants, etc. These competencies are the driving force that can continuously increase Hyundai Construction’s orders and sales.
- Growth potential in new business fields: Hyundai Construction also shows its presence in new business fields. Especially in the overseas plant field, it has received projects such as LNG plant and petrochemical plant, and in the marine/defense field, it has developed products such as offshore wind substructure and submarine. It also has know-how in building and operating hydrogen charging stations in the hydrogen field, and is developing products such as hydrogen storage tanks and hydrogen chargers. New business fields are opportunities to expand Hyundai Construction’s business areas and profitability.
- Synergy effects as a subsidiary of Hyundai Group: Hyundai Construction enjoys various synergy effects as a subsidiary of Hyundai Group. In particular, it is working with group companies such as Hyundai Motor and Hyundai Heavy Industries on new business related businesses, and shares resources such as technology and capital. It can also strengthen its competitiveness in domestic and overseas markets by utilizing Hyundai Group’s brand power and network.
Prospects of Hyundai Construction Stock
The prospects of Hyundai Construction stock are as follows.
- Expectation of performance improvement: Hyundai Construction recorded sales of 42 trillion 8 billion 8 hundred 6 million won, operating profit of 2 trillion 9 hundred 5 hundred 7 million won, and net profit of 1 trillion 5 hundred 6 hundred 9 million won in the first quarter of 2023. This was a significant improvement from the weak performance due to the impact of COVID-19 and exchange rate fluctuations last year. From the second quarter onwards, the performance is expected to increase further due to the recovery of the construction market and the favorable conditions of new business fields.
- Possibility of stock price increase: Hyundai Construction stock is trading at 53,600 won per share as of June 2, 2023 market close, with a market capitalization of 8 trillion 5 thousand 4 hundred billion won. The foreign ownership ratio is 11.33%, and the PER is 34.12 times. The stock price has fallen by -1.10% in the last month. This reflects that the expectations for performance improvement and construction market and new business growth have not been reflected yet. The stock price may rise further depending on Hyundai Construction’s business expansion and results announcement.
Conclusion
Hyundai Construction stock is a stock that has competence as a leader in the construction industry and has high growth potential in new business fields. It also enjoys synergy effects as a subsidiary of Hyundai Group. It has high potential for performance improvement and stock price increase, so it is a good stock to buy now.