[Edaily Reporter Park Soon-yeop] Although construction stocks rose sharply in the first half of this year, analysts suggest that whether nuclear power and reconstruction momentum translate into actual orders and earnings in the second half will determine the direction of stock prices. Since further gains may be limited by market expectations alone, the consensus is that investors should select companies capable of reflecting the benefits of nuclear power and reconstruction in their earnings, as well as those with strong earnings resilience.
Song Yu-rim, an analyst at Hanwha Investment & Securities, issued a “positive” outlook on the construction sector in a report on the 12th. While expectations of participation in nuclear power projects and the momentum of reconstruction projects have had a positive impact on major construction firms overall this year, she noted that for stock prices to rise again in the second half, it is necessary to both confirm the benefits from these sectors and limit any negative impact on earnings.

According to Hanwha Investment & Securities, as of the closing price on the 10th, the year-to-date stock return for the construction sector was 77.9%, trailing the KOSPI’s return of 83.4% by 5.5 percentage points. Among individual stocks, #Daewoo E&C saw the largest increase, rising 443.2%, followed by #Samsung E&A at 96.7%, #Hyundai Construction 85.9%, #DL E&C 71.1%, #Samsung C&T 70.1%, and #GS Construction 36.0%. #IPARK Hyundai Development fell 10.4%.
Researcher Song assessed that the trend in construction stocks this year differs from last year. He explained that while Hyundai E&C’s dominance was prominent last year, this year momentum—such as nuclear power plant exports, participation in the U.S. nuclear power market, and reconstruction projects—has spread across major construction companies. However, he emphasized that for this momentum to be fully reflected in stock prices, expectations must translate into tangible results, such as new orders and earnings.
Nuclear power was identified as a key variable for the second half of the year. The assessment is that the direction of global nuclear power market expansion is becoming clearer as Europe’s shift toward nuclear power aligns with policy support at the federal and state levels in the U.S. With the groundbreaking of large-scale nuclear plants and the first small modular reactors (SMRs) becoming a reality, the analysis suggests that nuclear power is moving beyond mere expectations and closer to reality.
However, hurdles remain before nuclear power projects directly translate into earnings. For large-scale nuclear power plants, risk allocation and financing are cited as key challenges, while SMRs face remaining risks related to commercialization verification, costs, and schedules. Researcher Song concluded, “Although final hurdles exist, it is necessary to prioritize the direction of nuclear power expansion from a medium- to long-term perspective.”
Regarding the momentum for reconstruction, he argued that attention should be focused on structural changes rather than simply benefiting from recovery projects. He explained that the core issue in the Middle East crisis lies not in production disruptions but in transportation disruptions, and consequently, investments in diversifying transportation routes—such as pipeline construction and the expansion of ports and storage facilities—are likely to take priority. Diversification of Middle East projects and the development of and investment in non-Middle East energy sources were also presented as new opportunities for construction companies.
In the housing sector, a gradual recovery in volume is expected. The recovery trend in domestic construction orders is relatively clear. In the first quarter of this year, domestic construction orders totaled 50.1 trillion won, a 28.7% increase compared to the same period last year. In particular, there was significant growth in private residential construction and public civil engineering projects, and within specific construction categories, orders for urban renewal, new housing, and factories and warehouses increased.
Apartment supply is also expected to rise. As of the end of May, the supply of apartments for sale stood at 90,000 units, an increase of approximately 40% compared to the 64,000 units recorded during the same period last year. This year’s apartment pre-sale plan is set at approximately 310,000 units, and even excluding units with undetermined pre-sale schedules, the volume is estimated to be around 251,000 units. This is a larger scale than last year’s 218,000 units.
The urban renewal market is also steadily growing. Order intake for urban renewal projects by the top 10 construction companies expanded from an average of 16 trillion won between 2015 and 2020 to an average of 30 trillion won between 2021 and 2024, reaching 49 trillion won last year. As of early June this year, orders totaling approximately 23 trillion won had already been secured. By company, the breakdown is as follows: Hyundai Engineering & Construction (8.1 trillion won), GS Engineering & Construction (7.5 trillion won), Samsung C&T (3.2 trillion won), and Daewoo Engineering & Construction (2.9 trillion won).
However, housing performance remains contingent on whether the situation in the Middle East persists. This is because concerns about margin erosion could arise if the burden of raw material prices, exchange rates, and construction costs increases again. Analyst Song explained, “While a gradual recovery in volume is expected amid the normalization of margins for the first time in three years, the prolonged crisis in the Middle East remains a negative variable.”
In terms of investment strategy, the report identified companies capable of translating positive investment themes—such as nuclear power and reconstruction—into earnings, as well as those with strong earnings resilience, as preferred picks. Hanwha Investment & Securities maintained Hyundai Engineering & Construction as its top pick and named DL E&C and Samsung C&T as second-tier picks. Hanmi Global and IPARK Hyundai Industrial Development, whose stock price declines were deemed excessive, were listed as stocks to watch.
Regarding individual stocks, the firm maintained a “Buy” rating and a target price of 200,000 won for Hyundai Engineering & Construction. It also maintained a “Buy” rating and a target price of 110,000 won for DL E&C. For Samsung C&T, the target price was raised to 520,000 won. Additionally, target prices were set at 63,000 won for Samsung E&A, 41,000 won for GS Engineering & Construction, 32,000 won for IPARK Hyundai Industrial Development, and 36,000 won for Hanmi Global.