KOSPI · 000720 · Construction · ₩000720

Hyundai Engineering & Construction현대건설

000720 · KOSPI · ₩000720 · 현대건설

₩95,500▲ ₩3,800 (4.14%)End-of-day · Oct 28, 2026 · End-of-day prices.

Trade

Sell Buy

Valuation model · Discounted cash flow (DCF)

We use a 5-year discounted cash flow: the value of the cash the business is expected to produce, in today's money.

Fair value per share

₩53,523

vs the current price (₩95,500)

Enterprise value: ₩7.9T
Equity value: ₩6T
WACC: 8.3%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal. This is not financial advice.

Why the model and the price differ

The model is 44% away from today's price. A gap this size usually means the market expects something the past figures don't show yet, or the model leaves something out. What we can see:

To match today's price of ₩95,500, the model needs an operating margin of 3.4% every year (it uses 2.4%).
Or revenue growth +17.5 points a year higher than assumed in each of the 5 years.
Analysts' forecasts for 2026: revenue ₩27T, operating profit — (1 broker). The model starts from the last 12 months reported.
Analysts' forecasts for 2027: revenue ₩28T, operating profit — (1 broker). The model starts from the last 12 months reported.
Margins ranged from −3.9% to 4.2% over the last 5 years, so this is a cyclical business. The model uses the average; the price may be set by where the cycle is now. Try the margin fade option.
Today's P/E is 24.0× against a typical 10.8× over the last 10 years.

Treat the model as a starting point: change the assumptions to the story you believe, and compare with the multiples check below.

Bear / Base / Bull

Bear: —
Base: ₩53,523; −44.0%
Bull: ₩184,696; +93.4%

Bear: revenue growth 3 points lower every year, EBIT margin 2 points lower, WACC 1 point higher. Bull: the opposite.

Assumptions

Cycle options

Margin path

Every year uses the cycle-average margin (2.4%).

Revenue growth

Revenue growth, year 113.5%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (13.5% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 210.9%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (13.5% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 38.3%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (13.5% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 45.6%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (13.5% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 53%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (13.5% a year, annual reports), fading to 3% by year 5.

Business

EBIT margin2.4%
Operating profit as a share of revenue.
Default: through-the-cycle average of the last 12 months and the last 5 annual reports' operating margins.
Tax rate27.5%
Share of operating profit paid as corporate tax.
Default: Korea's top corporate tax rate (25%) plus 10% local income tax.
Depreciation & amortisation0.5%
The non-cash cost of wearing out equipment, added back to cash flow (% of revenue).
Default: not in the statements, so 80% of capital spending (most spending replaces equipment that wears out).
Capital spending0.6%
Money spent on factories, equipment, software and other long-term assets (% of revenue).
Default: average of the last 3 annual reports (cash flow statements; equipment and intangibles).
Working capital11.9%
Stock and unpaid customer bills, less unpaid supplier bills, as a % of revenue. Each year's extra revenue ties up this much more cash.
Default: working capital (current assets less cash and deposits, minus current liabilities other than borrowings) as a share of revenue, averaged over the last 3 years.

Discount rate

Terminal growth2%
How fast cash flows keep growing every year after year 5.
Default: about Korea's long-run inflation plus real growth.
Risk-free rate4.08%
Yield on Korea's 10-year government bond: the return with almost no risk.
Default: Korea Treasury Bond 10-year yield on 2026-10-29.
Beta0.81
How much the share moves when the market moves: 1 means just like the market.
Default: 105 weeks of weekly returns against KOSPI (official index); raw beta 0.71, adjusted toward 1 and kept between 0.6 and 2.0.
Equity risk premium5.5%
The extra return investors want for owning shares instead of bonds.
Default: a typical premium for Korean shares.
Cost of debt (before tax)5.58%
The interest rate the company would pay to borrow.
Default: the 10-year yield plus a 1.5% credit spread.

Starting point

Revenue (TTM to H1 2026): ₩29T
Net debt (borrowings and leases − cash and deposits): ₩636B
+ Stakes and investments: ₩667B; Associates, long-term financial assets and deposits (book value)
− Minority interests: ₩1.9T
Shares: 112,410,458; incl. 1,054,693 preferred
Share price: ₩95,500
Market cap: ₩11T

TTM = trailing 12 months: the last four reported quarters added together. "TTM to H1 2026" is the 12 months up to the latest quarterly or half-year report (H1 = to the end of June). Year 1 grows from there.

Past years and projection

Grey columns are reported results from the annual reports (after-tax EBIT at the model's tax rate), so you can check the growth and margin assumptions against the past. Years 1–5 are the model.

	FY2023	FY2024	FY2025	Year 1	Year 2	Year 3	Year 4	Year 5
Revenue	₩30T	₩33T	₩31T	₩33T	₩37T	₩40T	₩42T	₩43T
Growth	39.6%	10.2%	−4.9%	13.5%	10.9%	8.3%	5.6%	3.0%
EBIT	₩785B	−₩1.3T	₩653B	₩790B	₩876B	₩949B	₩1T	₩1T
EBIT margin	2.6%	−3.9%	2.1%	2.4%	2.4%	2.4%	2.4%	2.4%
After-tax EBIT	₩569B	−₩916B	₩473B	₩573B	₩635B	₩688B	₩727B	₩748B
+ Depreciation	—	—	—	₩165B	₩183B	₩198B	₩209B	₩215B
− Capital spending	₩237B	₩199B	₩116B	₩198B	₩219B	₩237B	₩251B	₩258B
− Working capital	₩916B	−₩1.4T	₩1.3T	₩466B	₩427B	₩361B	₩264B	₩149B
Free cash flow	—	—	—	₩74B	₩172B	₩288B	₩421B	₩556B
Discount factor	—	—	—	0.923	0.853	0.788	0.727	0.672
Present value	—	—	—	₩68B	₩146B	₩227B	₩306B	₩374B

Terminal value ₩10T, worth ₩6.8T today: 86% of enterprise value. It assumes spending settles at 110% of depreciation once growth slows to the terminal rate.

Cross-check: what the market has paid before

For cyclical businesses, analysts check a DCF against the multiples the stock has traded at through past cycles. Price / book is the usual anchor for them: P/E looks highest at the bottom of a cycle, when earnings are smallest, and lowest at the top. The price each band would give today:

	Low	Typical	High
Price / book (book value ₩82,483 a share)Now 1.16×	₩35,9140.44×	₩48,0610.58×	₩117,3191.42×
Price / earnings (last 12 months: ₩3,987 a share)Now 24.0×	₩25,5236.40×	₩43,12510.8×	₩117,50029.5×
P/E on run-rate earnings (Q2 2026 × 4: ₩4,143 a share)Now 23.0×	₩26,5246.40×	₩44,81610.8×	₩122,10929.5×

Low, typical and high are the 10th percentile, middle and 90th percentile of month-end multiples since 2021, each against the latest report out by then, per share at today's share count; loss years and P/E above 100 are left out. Run-rate earnings are one quarter × 4, not a forecast. Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Sensitivity

Fair value per share as two inputs change; the middle is the current case.

WACC ↓ · Terminal growth →	1.0%	1.5%	2.0%	2.5%	3.0%
7.3%	₩61,274	₩64,706	₩68,757	₩73,620	₩79,582
7.8%	₩54,641	₩57,337	₩60,472	₩64,172	₩68,611
8.3%	₩48,934	₩51,071	₩53,523	₩56,372	₩59,732
8.8%	₩43,977	₩45,680	₩47,612	₩49,828	₩52,401
9.3%	₩39,632	₩40,995	₩42,526	₩44,261	₩46,248

Now (TTM)

Market cap: ₩11T
Enterprise value: ₩11T
P/E: 23.7×
P/B: 1.1×
P/S: 0.4×
EV/EBITDA: —
Dividend yield: 0.8%

Over time (at each year end)

	2025	2024	2023	2022	2021
Price	₩70,100	₩25,400	₩34,900	₩34,900	₩44,450
Market cap	₩7.8T	₩2.8T	₩3.9T	₩3.9T	₩4.9T
P/E	20.9×	—	7.3×	9.5×	12.1×
P/B	0.9×	0.4×	0.5×	0.5×	0.7×
P/S	0.3×	0.1×	0.1×	0.2×	0.3×
EV/EBITDA	—	—	—	—	—
Dividend yield	1.1%	2.4%	—	—	—

Versus similar companies

Company	P/E	P/B	P/S	EV/EBITDA	Dividend yield
Hyundai Engineering & Construction	23.7×	1.1×	0.4×	—	0.8%
Daewoo Engineering & Construction	—	1.5×	0.8×	—	0.0%
GS Engineering & Construction	19.7×	0.5×	0.2×	—	1.7%
DL E&C	3.6×	0.4×	0.3×	—	1.5%
KEPCO Plant Service & Engineering	14.4×	1.4×	1.2×	8.1×	0.0%
Ipark Hyundai Development	8.8×	0.5×	0.4×	—	2.9%
LS Marine Solution	125.4×	2.2×	5.0×	—	0.0%
Similar companies (median)	14.4×	1.0×	0.6×	8.1×	0.8%

Calculated from end-of-day prices and filed financial statements. Not a recommendation. This is not financial advice.

Also known as: Hyundai Engineering & Construction / 현대건설 / 000720 / KRX:000720

Source: KRX statistical information