Record Highs in a Row, HD Hyundai Group Stocks Performing Well

Shares of HD Hyundai Group are showing strong price gains, with several stocks hitting new all-time highs. Among the top 10 conglomerates in the first half of the year, HD Hyundai Group recorded the largest increase in market capitalization, and its market cap growth is expected to continue in the second half of the year.

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According to the Korea Exchange on the 11th, HD Hyundai Electric, HD Hyundai Korea Shipbuilding & Offshore Engineering, HD Hyundai Mipo, and HD Hyundai Heavy Industries all recorded intraday 52-week highs. HD Hyundai Electric rose 4.75%. Continuing its four-day winning streak, it climbed to an intraday high of 344,500 KRW, setting a new 52-week high. HD Hyundai Mipo increased by 4.49%, reaching an intraday high of 102,700 KRW, also marking a 52-week high. HD Hyundai Korea Shipbuilding & Offshore Engineering rose 2.76%, hitting an intraday high of 166,500 KRW, and HD Hyundai Heavy Industries climbed to an intraday high of 159,700 KRW, setting a new 52-week high as well. HD Hyundai Heavy Industries closed up 1.90%.

Factors such as increased orders and expectations for improved earnings are cited as reasons for the strong stock performance. HD Hyundai Electric, which has surged more than 300% this year, continues its record-breaking price rally. The boom in the power equipment market driven by increased demand from artificial intelligence (AI) has led to HD Hyundai Electric's strong stock gains. Minjae Lee, a researcher at NH Investment & Securities, said about HD Hyundai Electric, "Orders for power equipment destined for North America, which has secured favorable profitability, continue, and demand for ultra-high voltage transformers due to data center expansion will add to this." He added, "HD Hyundai Electric is currently discussing orders with delivery targets as far out as after 2030, and with the addition of ultra-high voltage transformers in the second half of 2024 and medium- and low-voltage circuit breaker expansions in 2025, profits are expected to increase."

HD Hyundai Mipo is expected to return to profitability in the second quarter of this year. Seunghan Han, a researcher at SK Securities, explained, "HD Hyundai Mipo's second-quarter sales are estimated to have increased by 1.5% year-on-year to 1.049 trillion KRW, and operating profit reached 4.4 billion KRW, achieving a quarterly profit turnaround one quarter earlier than previously expected."

HD Hyundai Korea Shipbuilding & Offshore Engineering is also expected to exceed market expectations for its second-quarter earnings. The researcher said, "HD Hyundai Korea Shipbuilding & Offshore Engineering's second-quarter sales are estimated to have increased by 5.5% year-on-year to 5.7552 trillion KRW, and operating profit surged 285.3% to 274.5 billion KRW, surpassing consensus (average securities firm forecasts)." He analyzed, "Among the shipbuilding subsidiaries, HD Hyundai Heavy Industries and HD Hyundai Mipo have shown faster-than-expected performance improvements due to process stabilization, leading to faster-than-expected growth in HD Hyundai Korea Shipbuilding & Offshore Engineering's consolidated results." HD Hyundai Korea Shipbuilding & Offshore Engineering has already secured 12.95 billion USD out of its 13.5 billion USD shipbuilding and offshore orders target for this year, achieving 95.9% of its goal.

Recently, target prices for HD Hyundai Group stocks have also been raised one after another. SK Securities raised HD Hyundai Mipo's target price from 90,000 KRW to 115,000 KRW, HD Hyundai Heavy Industries from 160,000 KRW to 193,000 KRW, and HD Hyundai Korea Shipbuilding & Offshore Engineering from 170,000 KRW to 200,000 KRW. HD Hyundai Electric's target price was raised from 280,000 KRW to 370,000 KRW. NH Investment & Securities increased HD Hyundai Mipo's target price from 93,000 KRW to 116,000 KRW. Kyobo Securities raised HD Hyundai Heavy Industries' target price from 161,000 KRW to 188,000 KRW and HD Hyundai Mipo's from 84,000 KRW to 115,000 KRW. BNK Investment & Securities raised HD Hyundai's target price from 80,000 KRW to 94,000 KRW, and Kiwoom Securities also raised it from 87,000 KRW to 101,000 KRW.

Meanwhile, depending on the industry conditions, there is a clear differentiation in stock prices and earnings among the group stocks. While shipbuilding stocks show strong earnings and stock price gains amid a recovery in the shipbuilding industry, machinery and renewable energy-related stocks have shown sluggish stock performance, being left out of the group's overall strength. HD Hyundai Infracore has fallen 10.59% this year, and HD Hyundai Energy Solutions dropped 5.72%. HD Hyundai Construction Equipment rose only 0.77%. Weak demand in major markets such as the U.S. and economic slowdown in China have led to poor earnings and stock performance.

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