KBC: Construction companies continue to be under-evaluated

KBC has “buy” recommendations for five of the six companies it is analyzing, namely Cominco and Comnord in Bucharest, Concefa Sibiu, Socot Targu Mures and Condmag Brasov. Analysts recommend to “sell” shares of the sixth company, Transilvania Constructii from Cluj.

KBC analysts indicated that the performance of the construction segment has exceeded the BET-C index performance in the past 12 months, due to the fact that construction companies were evaluated at very low prices, since these had low liquidity. KBC says transaction volumes have improved but companies are still capable of exceeding market expectations, since this segment has one of the highest growth rates in the entire economy.

According to KBC, income growth perspectives are very good, due to a large need for infrastructure work, to be sustained by investments from state and European Union funds, while private sector investments will be boosted by huge demand.