IBK Securities analyzed on the 10th that the additional investment review for the expansion of the Changwon plant and the U.S. plant by Hyosung Heavy Industries will strengthen its competitive edge in securing orders. It raised the target stock price from 630,000 won to 860,000 won, an increase of 36.5%, while maintaining an investment opinion of 'buy.' The closing price of Hyosung Heavy Industries on the previous trading day was 666,000 won.
IBK Securities expects that Hyosung Heavy Industries will record consolidated sales and operating profit of 1.297 trillion won and 120.6 billion won, respectively, for the second quarter of this year, an increase of 8.6% and 92.5% compared to the previous year.
Kim Tae-hyun, a researcher at IBK Securities, stated, "The increase in the revenue share from the highly profitable U.S. and Indian regions will make the profit growth noticeable," adding, "The operating profit margins for the U.S. and Indian branches were recorded at 29% and 25%, respectively, based on the first quarter, and similar levels are expected in the second quarter."
In particular, in the United States, the orders for ultra-high voltage circuit breakers are gaining momentum, making it positive in terms of portfolio diversification. It is estimated that about 30-40% of new orders will be ultra-high voltage circuit breakers, and sales efforts related to existing ultra-high voltage transformer customers are being strengthened. In India, the revenue share from 800 kV (kilovolt) ultra-high voltage circuit breakers is expected to increase, leading to improved profitability. In Europe, the order scope is also expanding to include the United Kingdom, Norway, Germany, France, and Spain.
Currently, Hyosung Heavy Industries is reviewing additional expansion investments following the expansion of its Changwon plant with a sales scale of 100 billion won and a U.S. plant with a sales scale of $200 million (approximately 271 billion won). Researcher Kim noted, "The market responsiveness that encompasses not only power grid replacements but also data center demand will be further strengthened through aggressive expansion."
He continued, "The benefits from the booming global power market are expected to last at least until 2030," and added, "A significant performance growth is also expected for the second quarter of this year."