Daishin Securities maintained its target stock price of 62,000 won and its investment opinion of "buy", saying the growth environment for Hyundai Elevator is favorable.
"Separate operating profit fell to KRW 24.9 billion in the third quarter, while its subsidiaries showed strong performance, while sales fell due to some delays due to a strike by the installation company, and operating profit fell due to a rise in raw materials," Daishin Securities analyzed.
"The exception for precision safety inspection has led to an increase in demand for essential parts with a time difference of three years, and demand for parts and remodeling has increased since the strengthening of the Elevator Safety Management Act in 2019," Daishin Securities said.
Daishin Securities also added, "Although it is difficult to estimate when the company will reflect its performance as it has carried out a price hike since July, the cost burden has passed its high point due to a gradual increase.".
"Hyundai Elevator expected to operate the Chungju plant and 13 billion won in annual depreciation costs from March next year, with 205 billion won from the sale of the existing Icheon plant and 320 billion won in total investment in the Chungju plant," Daishin Securities said. "Hyundai Elevator will increase efficiency by integrating the logistics center.".
"Hyundai Elevator completed a high-tech plant in Shanghai and aimed at domestic demand in China, and our current production capacity has doubled to 15,000 units from 7,000 units last year, and we expect to expand China's market share in the future," Daishin Securities added.
"Its performance has improved over a period of one to two years due to the builders' strong sales, and its annual performance is below expectations due to a strike by installation companies and a rise in raw materials," Daishin Securities said. "The performance will be reflected from the fourth quarter, the front industry has recovered, and maintenance will benefit from the strengthening of the law.".
Reporter Lee Dong-hoon email@example.com