Yuanta Securities Korea on the 14th said HD Hyundai Electric is expected to continue its earnings growth on the back of expanding power infrastructure demand centered on North America. It kept its "buy (BUY)" rating and raised the target price to 1.32 million won from 1.16 million won. The previous trading day's closing price of HD Hyundai Electric was 1,007,000 won.
Yuanta Securities Korea projected HD Hyundai Electric's first-quarter consolidated revenue this year at 1.0613 trillion won and operating profit at 267.9 billion won. Those are up 4.6% and 22.8%, respectively, from a year earlier.
Son Hyun-jung, an analyst at Yuanta Securities Korea, said, "First-quarter results appear likely to come in slightly below market expectations, but that is due to the timing of revenue recognition, not softening demand," adding, "After adjustments in the first half and a recovery trend in the second half, the uptrend in full-year results remains intact."
According to Son, despite increased shipments to North America in the first quarter, some revenue and profit are being deferred. In addition, revenue from Middle East projects has been spread into the second and third quarters due to geopolitical tensions between the United States and Iran, which has widened quarterly earnings volatility.
However, annual demand is seen as solid. Son said, "The increase in gigawatt (GW)-level power demand driven by the spread of artificial intelligence (AI) data centers and the expansion of ultra-high-voltage transmission investment are continuing," emphasizing, "This is a structural change, not a short-term cycle."
In particular, while demand for transformers and distribution facilities remains steady, the expansion of orders centered on North America and the emergence of long-lead-time demand in new markets such as Europe were viewed positively.
In addition, the flagship 765kV ultra-high-voltage transformer is expected to drive profitability improvements going forward. Son added, "The 765kV transformer is an area where full-fledged orders are expected starting in 2026, and along with a rise in average selling price (ASP), it will also contribute to improved profitability."