[Click e Stocks] Hyosung Heavy Industries, Dual Growth Expected from Transformers and Wind Turbines

[Asia Economy Reporter Hwang Junho] Yuanta Securities announced on the 24th that Hyosung Heavy Industries is expected to experience dual growth in transformers and wind turbines.

Hyosung Heavy Industries' business sectors consist of heavy industries manufacturing power and electromechanical equipment such as transformers, circuit breakers, and motors, as well as construction sectors including housing and civil engineering projects. Among these, transformers are essential components of power infrastructure.

Yuanta Securities anticipates growth in the electricity market due to increased electricity demand from electrification during the energy transition for carbon neutrality, expecting benefits for ultra-high voltage transformers and all power equipment essential for power distribution infrastructure. As of 2020, the global electricity market size was 23,000 TWh (approximately KRW 1600 trillion), with power equipment accounting for about 14% of the electricity market, of which transformers are estimated to make up about 40%.

Hyosung Heavy Industries plans to establish a 500MW turbine factory in collaboration with Shanghai Electric Wind Power (SEWP). The potential order amount is estimated at around KRW 800 billion annually. The potential demand for power equipment derived from turbines, such as transformers and reactive power compensation devices, is estimated at about KRW 3 trillion. The domestic wind turbine market is in its budding stage, with potential demand of approximately KRW 20 trillion.

Benefits from the growth of power equipment and wind power generation during the energy transition and renewable energy dissemination process are also expected. In particular, Hyosung Heavy Industries owns local factories in the United States and India, which is seen as a factor for high growth potential. Researcher Yoon Yonghan of Yuanta Securities analyzed, "Hyosung Heavy Industries owns transformer and STATCOM production plants in Tennessee, USA, and a gas-insulated switchgear (GIS) plant in India. The potential order size related to transformers and power equipment is estimated to be around KRW 15 trillion."

This content was produced with the assistance of AI translation services.