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Investing.com - JPMorgan has initiated coverage on Hyundai Engineering and Construction Co Ltd (KS:000720) with an Overweight rating and a price target of KRW84,000.00.
The investment bank cites Korea’s robust nuclear EPC (Engineering, Procurement, and Construction) capabilities as well-positioned to capture the more than $20 billion nuclear plant newbuild market expected between 2025 and 2027.
Hyundai E&C, recognized as a key nuclear construction partner for KEPCO and Westinghouse, is expected to secure approximately $10 billion in large-scale nuclear EPC orders over the next three years, according to JPMorgan.
The firm notes that nuclear projects typically offer superior earnings visibility and stability, as they are often government-backed, ensuring long-term revenue streams for contractors like Hyundai E&C.
JPMorgan believes the growth in the nuclear sector will help offset Hyundai E&C’s slow progress in domestic housing and hydrocarbon plant EPC, while the influx of nuclear orders is expected to enhance both the size and quality of the company’s orderbook, potentially leading to expanded valuation multiples and improved profit margins.
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