Korea Investment & Securities raised its target price for Hyosung Heavy Industries on the 3rd, saying the share of U.S. sales will continue to grow. It maintained its Buy rating and set a target price of 2.8 million won, up 55.6% from the previous level. Hyosung Heavy Industries' previous trading day closing price was 2,135,000 won.
Hyosung Heavy Industries' consolidated sales for the third quarter of this year came to 1.6241 trillion won, up 41.8% from a year earlier. Operating profit rose 97.3% on-year to 219.8 billion won. Operating profit beat the consensus (market forecast) of 153.8 billion won by 42.9%, delivering strong results.
Researcher Jang Nam-hyeon of Korea Investment & Securities said, "In the heavy industry segment, the share of U.S. sales reached 26%, up 3 percentage points (p) from the previous quarter, and the operating margin of the U.S. manufacturing subsidiary was 35%," adding, "Accordingly, the heavy industry segment's operating margin came in at 17.1%, 2.9 percentage points above the previous estimate."
Even with a 10 billion won tariff expense reflected, it posted the highest quarterly margin. In addition, the construction segment improved profitability as one-off expense factors were resolved, recording an operating margin of 5.0%.
Korea Investment & Securities predicted that the share of U.S. sales in Hyosung Heavy Industries' heavy industry segment will continue to grow. It estimated the share of U.S. sales at 29% in 2026 and 35% in 2027.
Jang said, "Reflecting profitability improvements if U.S. sales increase, we raised our operating margin estimates for the heavy industry segment in 2026 and 2027 by 1.4 percentage points and 4.9 percentage points, respectively, from the previous levels," adding, "In addition, we assumed the construction segment will also post an operating margin of more than 3.5%."
It also raised its operating profit estimates for 2026 and 2027 by 10.2% and 30.6%, respectively, reflecting the steep growth of the heavy industry segment and improved profitability in the construction segment. Accordingly, operating profit in 2026 and 2027 is projected to reach 946.7 billion won and 1.3536 trillion won, respectively.
Jang analyzed, "The 2025–2027 compound annual growth rate of earnings per share (EPS) for global power equipment companies is 13.8%, but for Hyosung Heavy Industries it is 47%," adding, "Compared with global peers, it has secured the fastest pace of profit improvement."