[Edaily Reporter Kim Kyung-eun ] On the 22nd, KB Securities maintained its “Buy” rating on HyundaiEngineering&Construction(000720), stating that the company’s nuclear power plant construction capabilities are set to attract renewed attention. However, it set the target price at 170,000 won—a 26.1% reduction from the previous target—which represents 2.1 times the 12-month forward book value per share (BVPS), reflecting an increase in the cost of equity due to factors such as a rise in the risk-free rate.

Jang Moon-jun, an analyst at KB Securities, stated in a report released today, “Although HyundaiEngineering&Construction’s stock price has recently been notably sluggish, we believe the second half of this year and next year will be the most critical period for nuclear power investment,” adding, “We continue to designate HyundaiEngineering&Construction—which is set to emerge as Korea’s leading nuclear power company and a global player in the sector—as our top pick.”

He continued, “Contrary to investor expectations in the first half of this year, news related to nuclear power was somewhat scarce. This can be seen as a reason for the sluggish performance of major nuclear power stocks,” but emphasized, “It is necessary to pay attention to nuclear power stocks again starting in the second half of the year, as various developments related to U.S. nuclear power are expected between the second half of this year and next year.”

He explained, “Following the U.S. Department of Energy’s (DOE) decision to provide $17.5 billion in loan support for the nuclear power supply chain, U.S. power utilities are expected to announce plans for new nuclear power plants starting in the second half of the year,” adding, “This is expected to coincide with the initial public offering (IPO) of Holtec—a key partner of HyundaiEngineering&Construction—the restart of the Palisades Nuclear Power Plant, and the groundbreaking for small modular reactors (SMRs).”

He also predicted that HyundaiEngineering&Construction’s nuclear power plant construction capabilities would draw attention, noting that, compared to other infrastructure projects, the value of time is particularly critical in nuclear power plant construction.

Researcher Jang added, “HyundaiEngineering&Construction has been continuously constructing nuclear power plants for over 50 years and has experience simultaneously participating in a total of 10 large-scale nuclear power plant projects in the early 2010s,” noting, “Above all, HyundaiEngineering&Construction’s position is bound to be unique given its track record of completing projects ‘On Time, On Budget’ overseas.”

HyundaiEngineering&Construction’s consolidated revenue for the second quarter of this year is projected to be 6.9 trillion won, with operating profit at 205.1 billion won—a decrease of 10.7% and 5.5%, respectively, compared to the same period last year. While the industry-wide trend of declining revenue applies equally, the firm is expected to post solid results due to improved profit margins in the housing sector and enhanced profitability across its consolidated subsidiaries.