Contents
Overseas business, public sector still strong 3
Hopes for a continued housing recovery have been well reflected in the sector
rerating since March, in our view. We expect the recovery to slow, but order
momentum overseas and in the public sector to continue in 2H09. Buy Samsung
Eng, Hyundai E&C and HDC.
3
Valuation and earnings forecasts 4
Housing – losing steam 6
Apartment transaction volumes and prices stabilised in May as very cheap real
estate became harder to find. Continued unloading of apartment inventory and PF
loans is positive but seems already discounted in share prices.
6
Overseas: more to come 10
We believe the commissioning of government-led energy projects in the Middle
East will continue in 2H09, backed by oil price recovery and low construction costs
(down 20-30% from the 2008 peak). Samsung Eng and Hyundai E&C look like the
biggest beneficiaries.
10
Public projects: strong 2H09F 12
We forecast the value of public projects will rise 29% yoy to W54trn in 2009
including turn-key orders of the 4-River Project amounting to W4.7trn in 2H09 (out
of total W22trn budget). Hyundai E&C and Daewoo E&C are leaders in the public
sector.
12
Company profiles
Samsung Engineering 16
Hyundai E&C 20
Hyundai Development 24
GS E&C 28
Daewoo E&C 33
2