HD Hyundai Construction Equipment (267270) Corporate Presentation summary

Company overview

• HD Hyundai Construction Equipment operates in the manufacture of construction and mining machinery, listed on the Korea Stock Exchange, and led by CEO Choi Cheol-gon.

• Major shareholders include HD Hyundai XiteSolution (35.6%) and NPS (5.05%).

• The company was established in 1985 and spun off from HHI in 2017.

• Headquartered at the HD Hyundai Global R&D Center in Gyeonggi-do, Korea.

• Issued shares total 18,305,586 as of September 2024.

Business status and regional performance

• Product portfolio includes excavators, loaders, special equipment, industrial vehicles, and parts, with mid to large excavators accounting for 56% of sales.

• 2023 revenue reached KRW 3.8 trillion, with parts and industrial vehicles contributing 12% and 11% respectively.

• Developed markets saw sales growth post-pandemic, but 2024 is expected to slow due to increased dealer inventory.

• India benefits from infrastructure investment and improved profitability, while Brazil's performance improved through local production and efficiency.

• Korea and China face weak demand and intensified competition, but some rebound is noted in China from 2023.

Financial and non-financial indicators

• Book value per share (BPS) has increased, but price-to-book ratio (PBR) remains below 1 due to low ROE.

• 2023 sales were KRW 3.8 trillion with an operating profit margin (OPM) of 6.7%.

• Shareholder return policy includes cash dividends and share buybacks, with a payout ratio over 30% of net profit for 2021–2023.

• Treasury stock cancellations and buybacks are ongoing to enhance shareholder value.

• Mid/long-term policy aims for over 30% shareholder return ratio and ROE above 12%.