Korea Investment & Securities said on the 13th that exports of ultra-high-voltage transformers to the United States by HD Hyundai Electric will continue to increase. It raised the target price to 760,000 won from 630,000 won and maintained a "buy" rating.
Jang Nam-hyeon, an analyst at Korea Investment & Securities, said, "The market is currently underestimating the cap on profitability for U.S. projects," and noted, "As operating profit estimates are readjusted going forward, it will lead to a share price rise."
Korea Investment & Securities estimated HD Hyundai Electric's third-quarter sales on a consolidation basis at 1.0212 trillion won, up 29% from a year earlier, and operating profit at 242.8 billion won, up 48.2% in the same period. This is 0.8% and 4.2% above the consensus (the average forecast of securities firms), respectively.
Jang said, "Because 64% of HD Hyundai Electric's second-quarter order backlog consists of North American projects, the current 35% share of North American sales will steadily increase through 2027," and explained, "From 2026, revenue recognition for projects ordered in 2024 will begin in earnest."
He added, "Given that the U.S. transformer producer price index (PPI) in Aug. 2025 rose 3.4% compared with the end of 2023, the profitability of projects to be recognized going forward will also improve," and analyzed, "With faster deliveries at the U.S. subsidiary slowing the pace of inventory buildup, the decline in operating margin due to consolidation adjustments will also lessen."