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Shinhan Securities Maintains 'Overweight' on Construction, Favors Housing Stocks
Industrial Services · Engineering & Construction · yonhap_finance · 2026-08-18
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Shinhan Securities maintains an overweight rating on the construction sector, citing a recovery in housing starts and presales as key drivers for growth.
What Happened
Sector Outlook: Shinhan Securities has maintained its 'overweight' stance on the construction sector, suggesting that housing-related stocks will continue to outperform. While global energy infrastructure remains a long-term theme, the firm notes that housing stocks offer better near-term potential due to project timelines and geopolitical factors.
Housing Market Recovery: Although new project launches remain limited, the domestic housing market is showing signs of recovery in construction starts and presales. Data through June shows a 14% increase in starts and a 60% rise in presales, providing a solid foundation for earnings improvement.
Top Picks and Policy Tailwinds: Government initiatives to expand housing supply and improved financing conditions are expected to benefit mid-sized construction firms. Analysts highlighted GS E&C, Kumho E&C, and Dongbu E&C as attractive picks, alongside cement producers like Hanil Cement and Asia Cement.
Valuation and Future Growth: With major mid-sized builders trading at a 12-month forward P/E of approximately 3.8x, the sector's historical reliance on housing is now viewed as a potential investment catalyst. As increased construction activity translates into revenue, analysts expect a rapid rebound in both earnings and stock prices.