Hyundai Engineering & Construction (000720) 🔎 In-depth
KOSPI · Price as of 2026-08-06 · Updated 2026-08-09
Hyundai E&C is Korea's largest general contractor, building everything from housing and commercial buildings (apartments, offices) to civil infrastructure (roads, bridges) and plant and energy projects (power plants, nuclear reactors, offshore wind), and it consolidates the results of its subsidiary Hyundai Engineering. After a heavy loss in 2024 tied to overseas project write-downs, the company swung back to profit in 2025 with operating profit of ₩653.0 billion and net profit of ₩373.1 billion, and it kept that recovery going in Q1 2026 with revenue of ₩6.28 trillion and net profit of ₩206.8 billion, up 24% from a year earlier. What stands out lately is that its expansion into nuclear power, SMRs and offshore wind, together with an order backlog of roughly ₩92 trillion and a net-cash position, is a clear strength, while an operating margin still in the low-2% range and the dependence of the profit recovery on cost control at overseas and housing sites remain points to watch.
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30-second brief
Pulled directly from the computed values below — not a separately written opinion.
What do the SourceComputedEstimateReading tags mean?
Source filings and exchange data · Computed calculated from public data · Estimate our own unverified projection · Reading drafted automatically, then rule-checked. See AI & Automation.
Core valuation metric
This stock's effective sub-sector is “General Construction” (Construction & Building Materials · Construction & Real Estate), a type typically read first through P/B.
General construction recognizes profits unevenly depending on order intake and project timing, and it rides project cycles hard, so a single year's earnings is a shaky basis for value. Price-to-book (P/B) — the share price against net assets such as land and construction holdings — is steadier and less whipsawed by that swing.
Price against assets alone says little about where the cycle stands. Reading it together with price against this year's expected earnings shows how far profits have recovered.
This note explains how each sector is typically valued and is educational context only, not investment advice.
At-a-glance assessment financial health · growth · profitability · valuation
- Revenue fell 4.9% year over year (3-year trend: mixed).
- Net profit swung from a loss a year earlier back into the black (a turnaround).
- Most recent quarter (Q1 2026) revenue was 15.8% lower than a year earlier.
- ROE is 4.5% (controlling-interest basis). It is below the sector average.
- Operating margin is 2.1%.
- A sector-metric and in-depth research verdict — see “Valuation vs peers” below for the basis.
Ownership & governance As of 2025-12-31
Largest shareholder Hyundai Motor 20.95% (individual)
Controlling bloc incl. related parties 34.92%
With the controlling bloc holding 35%, the ownership structure is stable.
🔎 In-depth analysis Reading
Hyundai E&C makes its money based on what it builds, across three broad lines. The first is housing and building construction: apartments, officetels and commercial facilities. The second is civil and infrastructure work such as roads, bridges, ports and subways. The third is energy construction, including power plants and petrochemical facilities as well as nuclear power, small modular reactors (SMRs) and offshore wind. The plant and overseas results of its subsidiary Hyundai Engineering are also consolidated into the group figures. More recently the company has been shifting away from a housing-heavy portfolio and putting weight behind nuclear power and renewable energy as its next growth engines.
The latest close is ₩112,600 and the market capitalization is ₩12.5 trillion. The price sits above its 20-day moving average (₩99,155) and below its 60-day moving average (₩121,487). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 55.1, a neutral level. The one-month change is +2.8%, the three-month change is -31.2%, and the position relative to the 52-week high is -40.3%. Relative strength versus the KOSPI is 53 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 53% of all stocks. Over the past three months it lagged the index by 20.0%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Starting with valuation multiples, the P/E ratio (how many times one year's profit the price represents) is 33.60x, which looks high, but that largely reflects 2025 profit being depressed in the early stage of the recovery. The P/B (price relative to net asset value) is 1.37x. Profitability is still low: ROE (how much the company earns on its equity in a year) is 4.5% and the operating margin is 2.1%, thin as is typical for construction. Bringing debt into the picture changes it somewhat. Net debt (total borrowings minus cash) is negative ₩855.7 billion, meaning the company holds more cash than debt, a net-cash position. As a result EV/EBITDA (enterprise value including debt divided by earnings before depreciation) is 14.1x, a lighter burden than the P/E implies. The debt-to-equity ratio of 236% looks high, but for a contractor construction advances and payables are booked as liabilities, so this is not unusual for the industry. That said, free cash flow was negative last year, showing a phase in which cash goes into large sites first.
Over five years, revenue grew from ₩18.1 trillion in 2021 to ₩32.7 trillion in 2024, then eased slightly to ₩31.1 trillion in 2025. Profit was more volatile. In 2024 the company recognized overseas project losses all at once, posting an operating loss of ₩1.2634 trillion and a net loss of ₩168.7 billion. In 2025 it swung back to an operating profit of ₩653.0 billion and net profit of ₩373.1 billion. In Q1 2026 revenue fell 15.8% year on year, but net profit rose 24%, a sign that earnings quality is improving as the troubled sites that drove the losses are cleared. The company's stated 2026 targets are revenue of ₩27.4 trillion, an operating margin of about 2.9%, and new orders of ₩33.4 trillion. The order backlog at the end of Q1 was roughly ₩92 trillion, securing several years' worth of work. That backlog, together with recovering cost control, is what should lift this year's profit above last year's.
A run of major disclosures came in June. On June 8 the company announced it had won the Wirye New Town Bokjeong Station-area complex development project for ₩3.0394 trillion. This large contract equals 9.8% of last year's consolidated revenue, with construction starting June 15 for 55 months. On June 9 it decided to issue ₩500 billion of convertible bonds (debt that can be converted into shares at maturity). Carrying a 0% coupon, the entire proceeds are earmarked as operating funds for new-energy businesses such as nuclear power, SMRs and offshore wind, to be deployed in stages over 2026-2027. It also held investor briefings (IR) on June 2 and 10. The company points to energy orders such as the Palisades SMR in the US and a Bulgarian nuclear project as pillars of this year's profit and growth.
Starting with the strengths: the company cleared its loss-making sites and returned to profit in 2025, and net profit continued to rise in Q1 2026, extending the recovery. An order backlog of roughly ₩92 trillion and a net-cash balance sheet mean it has both work and dry powder. Adding nuclear, SMR and offshore wind as growth pillars also differentiates it from housing-heavy peers. The cautions are equally clear. The operating margin is still thin at around 2%, so even a small swing in costs can move profit sharply. A recurrence of overseas-site losses like 2024 would shake the recovery narrative. In the end, the company is strong when cost control is stable and energy orders convert into actual revenue, and weaker when raw-material and site risks grow or the housing market cools.
🔎 Valuation vs peers Fairly valued
Compared against large Korean general contractors whose business mix overlaps.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| DL E&C | 7.54x | 0.52x | 9.35% |
| GS E&C | 29.83x | 0.58x | 1.87% |
| Samsung E&A | 15.70x | 2.02x | 12.98% |
| Daewoo E&C | — | 1.93x | -21.55% |
The P/B of 1.37x is higher than housing-focused builders such as GS E&C (0.51) and DL E&C (0.46). That premium reflects expectations tied to the nuclear and energy growth pillars and the return to profit. The trailing P/E of 30.3x looks demanding, but that is a distortion stemming from 2025 profit being low in the early stage of the recovery. For an earnings-inflection stock, the forward view is the right lens. If profit recovers this year in line with the company's management targets, the forward P/E drops to the low-20s. Even so, it is hard to call the stock undervalued the way DL E&C (6.5x) is, and factoring in the energy premium, we see it as fairly valued.
Earnings outlook Estimate company-stated · verified
| Type | Period | Revenue | Operating profit | Net profit |
|---|---|---|---|---|
| This year | 2026 | ₩27.4 trillion | approx. ₩800.0 billion | — |
Price history Close · MA20 · MA60
The latest close is ₩112,600 and the market capitalization is ₩12.5 trillion. The price sits above its 20-day moving average (₩99,155) and below its 60-day moving average (₩121,487). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 55.1, a neutral level. The one-month change is +2.8%, the three-month change is -31.2%, and the position relative to the 52-week high is -40.3%. Relative strength versus the KOSPI is 53 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 53% of all stocks. Over the past three months it lagged the index by 20.0%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -19.98% / 6M -10.41% / 12M -10.74%
Key metrics Computed vs sector median
Valuation
The P/E of 33.60x is above the sector median (6.86x). The P/B of 1.37x is above the sector median (0.47x).
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Intrinsic value (DCF estimate) Estimate
Model output — not a price target. This is what the formula returns under the assumptions below, not a view on where the share price should go.
DCF (discounted cash flow) estimate — discount rate 10.4%, initial growth 10.0%→terminal 2.0%, 10-yr forecast, earnings-based. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 4.5%, in line with the sector average (5.0%). The operating margin is 2.1%. The debt ratio is 190.3%, so the financial structure is moderate.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $20.8B | $23.0B | $21.8B | -4.92% ↓ slower |
| Operating profit | $551.8M | -$887.6M | $458.7M | — |
| Net profit | $376.5M | -$118.5M | $262.1M | — |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $12.7B | $14.9B | $20.8B | $23.0B | $21.8B |
| Operating profit | $529.3M | $403.9M | $551.8M | -$887.6M | $458.7M |
| Net profit | $286.3M | $287.2M | $376.5M | -$118.5M | $262.1M |
| Revenue CAGR | 4-yr avg 14.51% | ||||
Revenue fell 4.9% year over year (2023 ₩29.7 trillion → 2024 ₩32.7 trillion → 2025 ₩31.1 trillion), and the three-year trend is 'mixed'. The rate of decline widened from the prior year. Over the 5 years on record, revenue compound annual growth (CAGR) is 14.5%. The two-year revenue CAGR is 2.4%. In the most recent quarter (Q1 2026), revenue was 15.8% lower than the same period a year earlier.
Latest quarterly results Source Q1 2026 · vs year-ago
Technical indicators Computed
What stands out
- —
Points to watch
- Revenue fell 4.9% year over year (3-year trend: mixed).
- The price is high versus peers, so expectations already appear priced in.
Recent news & events searched · sourced
- 2026-06-08UpdateWon the Wirye New Town Bokjeong Station-area complex development project for ₩3.0394 trillion (9.8% of last year's consolidated revenue). Construction begins June 15, for 55 months.Broadens mid-term revenue visibility. A large urban complex development that secures work for the next several years. Source
- 2026-06-09FilingDecided to issue ₩500 billion of convertible bonds (0% coupon, maturity 2031-07-07). Proceeds fully earmarked as operating funds for new-energy businesses such as nuclear power, SMRs and offshore wind.Secures dry powder for energy growth investment. No interest burden at a 0% rate, but a possible increase in share count if the bonds are later converted. Source
- 2026-06-10IRNotice of an investor briefing (IR). Following June 2, a session explaining the business and results to investors.Limited short-term impact, but a direct channel to communicate the energy-transition strategy and order plans to the market. Source
- 2026-04-28EarningsQ1 2026 consolidated results: revenue ₩6.2813 trillion (YoY -15.8%), operating profit ₩180.9 billion (YoY -15.4%), net profit ₩206.8 billion (YoY +24%). Order backlog roughly ₩92 trillion.Revenue fell on base effects, but net profit rose, a sign of improving earnings quality. Source
Figure cross-check computed ↔ external
Recent filings Source
- 2026-06-10Disclosure
- 2026-06-10OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-09Material-fact report
- 2026-06-08Single supply/sales contract
- 2026-06-05Disclosure
- 2026-06-04OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-02Disclosure
- 2026-06-01Corporate governance report
- 2026-06-01Disclosure
- 2026-05-29Large-business-group status disclosure
- 2026-05-26Disclosure
- 2026-05-22OwnershipOfficers'/major-shareholders' holdings report
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.