Korea Investment & Securities said on the 14th that Hyosung Heavy Industries' decision to make an additional investment in its Memphis plant in the United States will lead to more than 850 billion won in sales from the Memphis plant starting in 2029. It maintained a Buy recommendation and a target price of 2.8 million won. Hyosung Heavy Industries' previous closing price was 2,253,000 won.
Hyosung Heavy Industries plans to invest an additional $157 million by 2028 to expand production capacity at its Memphis plant in the United States. Korea Investment & Securities viewed that Hyosung Heavy Industries is increasing the Memphis plant's annual production capacity to more than 1.6 times the existing level.
Jang Nam-hyeon, an analyst at Korea Investment & Securities, said, "We assess that the decision to further expand the Memphis plant is also a preemptive investment to respond to growing U.S. volumes."
With completion of the expansion targeted for 2026, the Memphis plant's annual production capa (capacity) was estimated to reach $400 million starting in 2027.
Jang said, "With this investment decision, additional expansion will continue through 2028, and after the expansion is completed, the annual production capa will exceed $600 million," adding, "Starting in 2029, the Memphis plant will generate more than 850 billion won in sales."
In the third quarter, Hyosung Heavy Industries' heavy industry institutional sector derived 26% of its revenue from North America, while the order backlog share was 46%. Considering the regional shares between revenue and order backlog, analysts say the share of revenue from North America will steadily increase.
Korea Investment & Securities estimated the share of revenue from North America at 29% in 2026 and more than 35% in 2027.
Jang said, "We are maintaining an order strategy centered on the United States with strong profitability, and more than 50% of new orders next year are expected to come from North America," adding, "As a result, the increase in the share of U.S. revenue will continue over the medium to long term."
Jang added, "As the order backlog centered on the United States continues to expand, profit improvement will continue beyond 2028."