Hyundai Engineering & Construction stocks dropped nearly 50% from April highs to recent trading levels around 100,000 won, driven by investor disappointment over delayed nuclear power project contracts. The stock peaked at 198,400 won during April trading and closed at 101,400 won on the 15th, with recent intraday prices falling into the 90,000 won range. Mirae Asset Securities and Shinhan Investment Securities both lowered their target prices but maintained 'buy' ratings, citing that the fundamental value of the company's nuclear business remains intact despite contract timing delays. The decline reflects postponed overseas nuclear power order expectations rather than diminished project viability, according to brokerage analysis.
Hyundai Engineering & Construction Stocks Fall 50% From April Peak
According to Korea Exchange data, Hyundai Engineering & Construction stock price rose to 198,400 won during April trading. The stock then reversed into a downtrend and closed at 101,400 won on the 15th. Considering recent intraday prices dropped into the 90,000 won range, the stock effectively lost half its value. Over the past month alone, the decline exceeded 30%. According to Mirae Asset Securities and Shinhan Investment Securities reports, as of the 15th, Hyundai Engineering & Construction's 1-month return reached negative 30.1% and its 3-month return reached negative 43%.
Mirae Asset and Shinhan Investment Lower Target Prices
Mirae Asset Securities lowered Hyundai Engineering & Construction's target price from 213,000 won to 175,000 won, an 18% reduction. Shinhan Investment Securities reduced its target from 180,000 won to 170,000 won, a 6% cut. Both securities firms maintained their 'buy' investment opinion. The reasons for target price reductions differed slightly between the two firms, but neither viewed the nuclear business's fundamental value as damaged. The target price reductions reflect delayed contract timing and increased market required rates of return rather than eliminated order possibilities, according to their explanations.
Brokerage Firms Forecast Strong Q2 Earnings
Mirae Asset Securities estimated Hyundai Engineering & Construction's Q2 consolidated revenue at 6.84 trillion won and operating profit at 245.5 billion won. The operating profit estimate exceeds the market consensus of 200.5 billion won by approximately 22%. Shinhan Investment Securities projected Q2 revenue at 6.765 trillion won and operating profit at 247.5 billion won. This operating profit forecast surpasses market expectations by 23.4%. While the two securities firms' detailed estimates differ somewhat, both agreed that Q2 operating profit will reach the mid-to-high 240 billion won range, significantly exceeding market expectations.
Hyundai Engineering & Construction Maintains Nuclear Power Project Pipeline
The primary reason securities firms maintain buy opinions is the overseas nuclear power order pipeline. Major projects Hyundai Engineering & Construction participates in include US Holtec's Palisades Small Modular Reactor (SMR), US Fermi America's large nuclear plant, and Bulgaria's Kozloduy nuclear plant. Shinhan Investment Securities expects the Palisades SMR contract to be awarded separately across Q3 and Q4. The schedule delayed beyond market's initial expectations, but contract possibility has not disappeared, according to the explanation. The Fermi nuclear plant project in Texas also remains a core expectation.
Kim Gi-ryong, Mirae Asset Securities researcher, stated "Despite delays in overseas nuclear performance, possibilities remain valid" and emphasized maintaining buy opinion and top pick status. Kim Sun-mi, Shinhan Investment Securities researcher, explained "Despite solid earnings and order performance, as a representative nuclear stock, the stock price is determined by nuclear business progress speed" and stated expecting stock price upward reversal after Q4.
FAQ
Why did Hyundai Engineering & Construction stocks drop 50% from April?
The stock declined due to investor disappointment over delayed nuclear power project contract timing. The price peaked at 198,400 won during April trading and fell to around 100,000 won by the 15th, with recent intraday trading in the 90,000 won range. The 1-month return reached negative 30.1% and the 3-month return reached negative 43% as of the 15th.
What are Hyundai Engineering & Construction's key nuclear power projects?
Major projects include US Holtec's Palisades Small Modular Reactor (SMR), US Fermi America's large nuclear plant in Texas, and Bulgaria's Kozloduy nuclear plant. Shinhan Investment Securities expects the Palisades SMR contract to be awarded separately across Q3 and Q4.
Why do brokerage firms maintain buy ratings despite lowering target prices?
Mirae Asset Securities and Shinhan Investment Securities both maintained buy ratings because they view the nuclear business's fundamental value as intact. The target price reductions reflect delayed contract timing and increased market required rates of return rather than eliminated order possibilities, according to their analysis.
