Construction Presale volume growth to support earnings improvements Overweight (Maintain) Large builders’ presale volume to increase 44% in 2020 In 2020, large builders (Hyundai E&C, Daewoo E&C, GS E&C, Daelim Industrial, and Industry Report Hyundai Development) are planning 122,000 apartments for presale, up 92% from last year’s actual presale volume. Applying the historical average ratio (75%) of actual January 10, 2020 presales to planned presales, we expect presale volume to be around 92,000 units in 2020, up 44% from 2019. Presale growth to support earnings improvements; Large builders gaining Mirae Asset Daewoo Co., Ltd. market share [Construction/Building Materials ] The continued decline in apartment presales since 2018 has led to mo unting worries about housing earnings. However, we believe large builders’ increased presale Kwangsoo Lee volumes in 2020 will support housing earnings improvements. Notably, large builders’ +822 -3774 -1457 share of the housing market is growing. Based on presale plans for 2020, we ex pect
[email protected] the five big builders to account for 35% of the market this year—the highest level on record. We believe large builders will continue to gain ground, driven by market shifts Junghan Yoon +822 -3774 -1371 toward reconstruction/redevelopment and greater differentiation. If such mark et
[email protected] share expansion continues, large builders should be able to generate stable profits from housing, even if the overall presale market shrinks. Improving presale ratios and presale volume growth to help stabilize sentiment Initial presale ratios have l ately been improving, especially in the Seoul capital area.