[Click e-Stock] "HD Hyundai Electric Begins Export Diversification... Target Price Raised"

On September 26, Daishin Securities raised its target price for HD Hyundai Electric to 7.3 million won, citing the company's full-scale diversification of export regions and products for power equipment.

Daishin Securities projected that HD Hyundai Electric’s sales for the third quarter of this year would reach 990 billion won, a 26% increase compared to the same period last year, and that operating profit would rise by 40% year-on-year to 229.6 billion won.

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Heo Minho, a researcher at Daishin Securities, stated, "Despite the impact of U.S. tariffs, profitability is expected to improve due to the continued high proportion of sales to the United States, rising prices for power equipment in regions outside the U.S., and rapid inventory clearance by the U.S. sales subsidiary." He added, "It is estimated that the product prices subject to actual tariffs will account for about 85% of sales, so the actual tariff burden is expected to be less than initially feared."

In the second quarter, HD Hyundai Electric began diversifying both its regional markets-including Europe and the Middle East-and its product portfolio, such as ultra-high voltage circuit breakers and distribution equipment. Researcher Heo said, "Recently, the company has succeeded in diversifying its export destinations and products by winning orders for ultra-high voltage transformers and circuit breakers in Europe, signing a memorandum of understanding for supplying power equipment to data centers, and securing an order for 24 765kV transformers in the U.S. worth 277.8 billion won."

He continued, "Going forward, demand for power equipment in the Middle East is also expected to increase significantly due to the construction of AI data centers. HD Hyundai Electric has established strong references and sales capabilities in the Middle East over a long period, so it is expected to benefit from this trend." He added, "With the completion of distribution equipment capacity expansion in the second quarter, a gradual increase in distribution equipment sales is also anticipated."

Researcher Heo maintained a 'buy' investment rating for HD Hyundai Electric and raised the target price to 7.3 million won. He explained, "In the fourth quarter of this year, domestic production capacity for distribution circuit breakers is scheduled to be expanded by 250 billion won, and a gradual increase in the operating rate is expected through 2030." He further stated, "Based on robust cash flow, there remains the potential to secure additional growth drivers through further capacity expansion and mergers and acquisitions."

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