Hyundai Elevator Buoyed By Korean Government Policies

New housing starts and elevator installations in Korea should continue to grow in response to government policies aimed at expanding housing supply, and accordingly, Hyundai Elevator is set to enjoy profitability improvement, considering signs of earnings recovery at its subsidiaries (including its tourism, leisure, and finance businesses), BusinessKorea reported on June 3. Government policy initiatives should ensure that housing construction and elevator installation volume continue rising going forward — both the ruling party and the main opposition party have made proposals aimed at expanding housing supply in metropolitan areas. Over the long term, rising housing supply should lead to trickle-down effects in the form of higher demand for elevators. Of note, domestic housing construction starts rose 15.6% year-over-year (YOY) in 4Q20 and 13.1% YOY in 1Q21, and domestic elevator installations increased 5.3% YOY in 4Q20 and 13.3% YOY in 1Q21. Hyundai Elevator’s non-operating income is also set to improve, helped by the separation of Hyundai Merchant Marine from Hyundai Group, reduced exposure to derivatives, and earnings turnarounds at its subsidiaries, according to the source.