Hyundai E&C Shares down 7% on a construction defect issue; recommend buying on the dip

研报英文原文证据摘录

Hyundai E&C Shares down 7% on a construction defect issue; recommend buying on the dip

J P M O R G A N Asia Pacific Equity Research

18 May 2026

Hyundai E&C Overweight

000720.KS, 000720 KS

Shares down 7% on a construction defect issue; Price (18 May 26):W145,700

recommend buying on the dip Price Target (Dec-27):W180,000

Hyundai E&C (HDEC) shares fell 7% on reports of construction defects at the Korean Autos

ACSamseong Station section of GTX Line A. HDEC stated it first identified and Sonny Lee

reported the issue in November 2025 and has proposed reinforcement work. We (82-2) 758 5716

estimate a worst-case OP impact of ~W23bn if liquidated damages are imposed for sonny.lee@jpmorgan.com

delays. Further downside appears limited given the company’s self-reporting and Seri Yoon

proactive proposal for reinforcement, reducing brand overhang for future civil (82-2) 758 5704

works. We reiterate Overweight and view the pullback as a buying opportunity, seri.yoon@jpmorgan.com

J.P. Morgan Securities (Far East) Limited, Seoul

with upside supported by nuclear order catalysts (Westinghouse Bulgaria, Holtec Branch

SMR, Team Korea Vietnam/US) and ROE normalizing from ~5% in 2026E to

~13% in 2028E.

• Shares fell 7% today on a construction defect issue at a domestic civil

engineering site. HDEC shares fell by 7% as investor sentiment weakened

after news articles (link) highlighting its involvement in an incident related to

missing rebar at the Samseong Station section of the GTX (Great Train

eXpress; high-speed passenger rail network in Seoul Metropolitan Area) Line

A project. Regulators stated that 178 tons of rebar were omitted from 80 main

pillars on the level B5 of Yeongdongdaero transfer center. The company