[Click e-Stock] "Hyosung Heavy Industries: Focus on U.S. Orders Over Earnings Figures... Target Price Raised"

Target Price Raised from 3.6 Million Won to 4.7 Million Won

On April 28, SK Securities raised its target price for Hyosung Heavy Industries from 3.6 million won to 4.7 million won and maintained its "Buy" investment rating.

Naminsik, a researcher at SK Securities, noted that although Hyosung Heavy Industries' first-quarter results fell short of market expectations in terms of numbers, the company should focus more on orders from the United States. In the first quarter of this year, Hyosung Heavy Industries recorded sales of 1.3582 trillion won, up 26% year-on-year, and operating profit of 152.3 billion won, up 49%. However, both figures were 9% below market expectations.

Regarding this, Naminsik explained, “If one-off factors are included, the results are essentially in line with market expectations. The reason for the shortfall was the deferral of about 40 billion won in high-margin circuit breaker sales to the United States, which is expected to be shipped normally in the second quarter.”

He also shifted the focus of the earnings announcement to "orders." He stated, “New orders in the heavy industries segment reached a record-high 4.1745 trillion won for a single quarter, with the U.S. accounting for 77% of this amount. In effect, the company achieved more than half of last year’s annual new orders in just one quarter. It is highly likely that this year’s guidance for new orders—previously set at ‘10% growth year-on-year’—will be revised upward.”

As key areas to watch going forward, he cited: ▲ the flow of follow-up orders for 765kV projects ▲ the scale of upward guidance revisions ▲ the timing of visible mass production orders for SSTs for U.S. data centers. Naminsik emphasized, “The core of U.S. orders in the first quarter of this year lies in the single project order for 765kV transformers, which is worth about 920 billion won. This will not be the end of such projects, and I believe this momentum will continue.”

He further added, “The commercialization of SSTs for artificial intelligence (AI) data centers is related to 800VDC, so it warrants attention. Hyosung Heavy Industries has clearly stated that it is promoting the commercialization of SSTs for U.S. data center power supply, and I think the timing of reference visibility is highly likely to serve as a trigger for a share price re-evaluation.”

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