[Click eStock] "HD Hyundai Electric, Demand Remains Strong... 1Q Surprise Earnings Expected"

Power Shortages Worsen Due to U.S. Reshoring
Further Expansion in Demand Expected

HD Hyundai Electric's stock price has recently declined due to negative factors such as Microsoft (MS) canceling its data center investment and U.S. President Donald Trump's tariff policies, but there is still a forecast that its earnings will continue to soar. This is because deferred volumes will be reflected in the first quarter of this year, and the company has already secured sufficient order volumes.

On the 28th, Shinhan Investment Corp. maintained its 'Buy' rating on HD Hyundai Electric based on these factors. The target price was lowered by 4% to 480,000 KRW. The closing price the previous day was 304,000 KRW. Although it has fallen more than 30% from its peak, analysis suggests there is still room for the stock price to rise based on earnings.

Shinhan Investment Corp. estimated that HD Hyundai Electric will record sales of 969.2 billion KRW and operating profit of 216.1 billion KRW in the first quarter of this year. This represents increases of 21% and 68%, respectively, compared to the same period last year, and is expected to exceed market consensus. The operating profit margin is expected to improve by 2.1 percentage points from the previous quarter to 22.3%. This is explained by the combined effects of deferred volumes reflected in the fourth quarter of last year, the rise in the KRW-USD exchange rate, and a reduction in fixed cost burdens.

The total orders for this year are expected to exceed the company's guidance of 4.2 billion USD, significantly surpassing the target of 3.8 billion USD. As demand continues to expand, the company has secured order capacity for the second phase of facility investment expansion, and the short-term demand fluctuations in data centers are expected to be minimal. Donghyun Lee, a researcher at Shinhan Investment Corp., explained, "U.S. tariffs will accelerate reshoring (returning overseas production to domestic), leading to worsening power shortages. Due to the shortage of power equipment, the U.S. tariff pressure will become difficult, ultimately resulting in increased demand and unit prices."

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