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Investing.com - UBS has downgraded Hyundai (OTC:HYMTF) Engineering and Construction Co Ltd (KS:000720) from Buy to Neutral, while reducing its price target by 24% to KRW62,000 from KRW81,500.
The downgrade reflects UBS’s expectation of additional write-offs from problematic overseas projects, beyond losses the firm had previously anticipated for the construction company.
UBS also cited assumptions of a slower recovery in the domestic housing market due to stricter government policies as a factor in its rating change.
Despite the downgrade, UBS believes Hyundai Engineering’s strong position in global nuclear power plant construction will provide "downside support in the mid/long term."
The firm noted that Hyundai Engineering’s nuclear exposure and the softer housing market conditions appear to be largely priced into the current stock valuation.
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