[Click eStock] Hyosung Heavy Industries, 1Q Earnings Shock... Daishin Says "Only Improvements Ahead"

[Asia Economy Reporter Ji Yeon-jin] Daishin Securities stated on the 21st that it maintains a buy rating and a target price of 85,000 KRW for Hyosung Heavy Industries, expecting a turnaround this year due to last year's restructuring. In the second half of the year, exports of power equipment are expected to increase, and momentum from data centers, wind power, and hydrogen is expected to be highlighted.

Hyosung Heavy Industries reported first-quarter sales of 583.2 billion KRW, down 8% year-on-year, and operating profit turned positive at 17.5 billion KRW. Sales were 11% below market expectations, and operating profit was 30% lower, which is considered an 'earnings shock.'

Due to delays in exports caused by COVID-19, heavy industry sales decreased by 15% to 326.3 billion KRW, with operating profit recovering to 1.9 billion KRW from last year's operating loss of 76.6 billion KRW. However, construction sales fell 27% year-on-year, and operating profit decreased by 102%. Lee Dong-heon, a Daishin Securities analyst, said, "The turnaround is beginning from a low base, and the business divisions' conditions will pass the bottom," adding, "Recently, with rising raw material prices, cyclical stocks are gaining attention, and power equipment in global infrastructure investment tends to lag. It will be reflected with a time lag due to improvements in emerging market economies."

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