[Market Focus] HD Hyundai Infracore Rises 5% on Engine Business Boom Expectations

HD Hyundai Infracore shares are showing strong performance. As demand for engines increases in sectors such as shipbuilding and defense, the company's expansion through investment in the Gunsan plant appears to be a key driver.

As of 9:54 a.m. on September 5, HD Hyundai Infracore shares were trading at 15,400 won, up 6.21% from the previous day. The boom in the engine business and its growth potential are seen as positive factors.

In the second quarter of this year, HD Hyundai Infracore's engine business recorded sales of 327.1 billion won, a 2% increase compared to the same period last year. Operating profit during the same period rose 32% to reach 67.2 billion won. The operating margin for the engine segment was 20.5%, more than four times higher than the 4.5% margin in the construction equipment segment. Driven by the growth of industrial and defense engines, the company exceeded its annual engine operating margin target of 9.3% within just half a year.

Lee Dongheon, a researcher at Shinhan Investment Corp., explained, "For industrial engines, demand will continue to rise due to increased replacement needs for aging generators related to U.S. oil and gas rigs, as well as increased fossil fuel production during the Trump administration. In the case of defense engines, repeated production such as the ramp-up of Hyundai Rotem K2 tank orders and a booming market are driving up unit prices, making it highly likely that the current profit margin can be maintained."

HD Hyundai Infracore is investing in its Gunsan plant for industrial and defense engines, as well as battery modules and packs (EPP). Mass production of defense engines is scheduled for October next year, while ultra-large engines are slated for mass production in January 2027. The battery module and pack plant aims to begin mass production in August next year. In addition, the company is developing hydrogen engines to address distributed power generation, data centers, and other applications.