[Click eStock] Benefiting from US Inflation Reduction Act?..."Hyundai Electric, Order Increase"

[Asia Economy Reporter Ji Yeon-jin] IBK Investment & Securities announced on the 7th that it is raising the target price for Hyundai Electric from 32,000 KRW to 39,000 KRW, citing a rapid increase in order backlogs for products destined for the US, the Middle East, and shipbuilding.

Lee Sang-hyun, a researcher at IBK Investment & Securities, stated, "In the US, infrastructure investment and the Inflation Reduction Act are expected to increase orders for power equipment. The Alabama corporation in the US has increased its order backlog to $470 million by the end of the first half based on large-scale orders, which is expected to lead to favorable sales growth and profitability improvement." He emphasized, "In the Middle East, orders are increasing in Saudi Arabia and other countries due to high oil prices, and shipbuilding products are also showing a favorable order trend as the increase in shipbuilding orders is reflected with a time lag."

Hyundai Electric's profitability in the second half of the year is expected to improve compared to the same period last year. This is due to the power equipment market shifting to a supplier-driven market and the easing of raw material and logistics cost burdens. The company's third-quarter sales are projected to increase by 27% year-on-year to 500.6 billion KRW, and operating profit is expected to rise by 237% to 25 billion KRW.

The researcher said, "Considering that operating losses were recorded in the fourth quarter of last year due to one-time factors (provision for ordinary wages), a turnaround to profitability is expected, indicating overall profitability improvement in the second half." He explained, "Orders in the first half increased by 71% year-on-year to 1.6 trillion KRW, and the order backlog at the end of the first half rose by 82% to 3.2 trillion KRW."

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