Hyundai Engineering & Construction is forecast to post a Q2 2026 operating profit of 221.8 billion won, up 2.24% year-over-year, despite a 12.23% revenue decline to 6.776 trillion won, according to a consensus of 13 securities firms compiled by Yonhap Infomax on July 24. The profit growth is attributed to improved cost management in the housing division and cost adjustments at large overseas plant sites. Revenue contraction stems from reduced apartment presales and delayed nuclear power orders, impacting the Korean construction sector in the first half of 2026.
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Source: Yonhap Infomax, AI-generated image
Hyundai E&C Q2 2026 Profit Forecast Rises Despite Revenue Drop
Ryu Tae-hwan, analyst at Eugene Investment & Securities, stated that the construction and housing divisions face inevitable revenue contraction due to past presale declines. He noted that accounts receivable and unbilled construction increased from Q4 2025 to Q1 2026, requiring continuous monitoring of excessive receivables.
Kim Do-yeop, analyst at Yuanta Securities, said the housing division's cost improvement trend will continue until early next year due to increased sales from low-cost sites launched after 2023 and urban redevelopment projects. Cost improvements at large plant sites including Saudi Arabia's Amiral Package 1 and Poland's olefin project, plus contract amount changes at subsidiary Hyundai Steel Industry's Sinan Wooi offshore wind project, contributed to profit gains.
Kim Sun-mi, analyst at Shinhan Investment Corp., projected that even after reflecting potential losses from the Shaheen Project workplace accident and Samsung Station GTX construction issues, one-time profits from cost adjustments in housing, plants, and consolidated subsidiaries will exceed consensus estimates.
Accounts Receivable Surge Raises Monitoring Concerns
According to Hyundai E&C's Q1 2026 business report, accounts receivable reached 7.6636 trillion won, an increase of over 800 billion won from year-end 2025 (6.8423 trillion won). Unbilled construction also rose from 3.9374 trillion won to 4.1297 trillion won, an increase of approximately 190 billion won during the same period.
Analysts warn that if tied-up receivables increase while revenue contracts, this could lead to future loss recognition.
First-Half 2026 New Orders Reach 23 Trillion Won
First-half 2026 consolidated new orders totaled approximately 23 trillion won, achieving about 68% of the annual guidance of 33.4 trillion won. Large projects including Hyundai Steel's U.S. electric arc furnace steel mill and Hyundai Engineering's Kazakhstan gas processing facility drove first-half orders. Second-half projects awaiting orders include Papua New Guinea LNG plant and Wando Geumil offshore wind project.
Kim Sun-mi of Shinhan Investment stated that first-half construction rights secured reached approximately 8 trillion won, reaffirming the company's industry-leading position. She projected continued revenue growth from large-scale self-development projects and full-scale urban redevelopment construction. The 3 trillion won Bokjeong Station area complex development project is expected to be recognized in Q2 new order results.
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Hyundai E&C stock price trend. Source: Yonhap Infomax
Nuclear Power Project Delays Impact Stock Performance
Market observers cite delayed nuclear project order schedules as a primary factor in Hyundai E&C's first-half stock underperformance. The stock peaked at 198,400 won intraday in April 2026, then declined to trade at 110,300 won as of 10:42 a.m. on July 24.
Jang Moon-joon, analyst at KB Securities, stated that from the second half, the U.S. Department of Energy's $17.5 billion supply chain loan support decision is expected to drive new nuclear projects by power utilities. He noted that key partner Holtec's IPO, Palisades nuclear plant restart, and SMR construction commencement will refocus attention on nuclear stocks.
Jang added that Hyundai E&C holds a unique position with 50 years of continuous nuclear construction experience and participation in 10 large-scale nuclear plants simultaneously in the early 2010s, including Shin-Kori, Shin-Ulsan, Shin-Hanul, and Barakah plants.
FAQ
What is Hyundai E&C's Q2 2026 operating profit forecast?
According to 13 securities firms surveyed by Yonhap Infomax on July 24, Hyundai Engineering & Construction's Q2 2026 operating profit is forecast at 221.8 billion won, up 2.24% year-over-year, despite a 12.23% revenue decline to 6.776 trillion won.
Why did Hyundai E&C's accounts receivable increase in Q1 2026?
Hyundai E&C's Q1 2026 business report shows accounts receivable reached 7.6636 trillion won, an increase of over 800 billion won from year-end 2025. Unbilled construction also rose by approximately 190 billion won to 4.1297 trillion won during the same period, raising concerns about tied-up receivables amid revenue contraction.
How much did Hyundai E&C secure in new orders during the first half of 2026?
First-half 2026 consolidated new orders totaled approximately 23 trillion won, achieving about 68% of the annual guidance of 33.4 trillion won. Large projects including Hyundai Steel's U.S. electric arc furnace steel mill and Hyundai Engineering's Kazakhstan gas processing facility drove the orders.
