Korea Investment & Securities Co. on the 2nd said Hyosung Heavy Industries is seeing profit margin improvement from rising sales and simultaneously strengthening its growth engine through additional plant expansion. It kept a "Buy" investment rating and raised its target price to 41 million won from 36 million won. The previous trading day's closing price of Hyosung Heavy Industries was 2,503,000 won.
Jang Nam-hyeon, an analyst at Korea Investment & Securities Co., said, "With the rising share of U.S. sales improving margins, the compound annual growth rate of earnings per share (EPS) for 2025–2028 is estimated at 41.5%," and noted, "While the supplier-favorable environment in the United States and Europe continues, additional capacity expansions have strengthened medium- to long-term growth drivers."
Specifically, it projected that the share of U.S. sales will exceed 30% starting in the third quarter of 2026, when production for U.S.-bound volumes increases at the Changwon plant. Accordingly, it estimated the U.S. sales mix for this year and next at 29% and more than 35%, respectively.
It forecast the operating margin of the heavy industry division at 19% this year and 22.6% next year, up 2.1 percentage points and 3.7 percentage points from a year earlier, respectively. As a result, it expected operating profit of 1.0474 trillion won this year, up 40.3% on-year, and 1.4946 trillion won next year, up 42.7% on-year.
It also analyzed that as investment expands in U.S. projects to build 765kV ultra-high-voltage power grids, the likelihood of new orders has increased.
Jang said, "We have proactively built production facilities in the United States ahead of competitors and secured references (orders for 765kV projects worth 200 billion won in September 2025 and 787.1 billion won in February 2026)," adding, "As the order backlog mix improves centered on highly profitable 765kV, the profit improvement trend will continue beyond 2028."