In early trading on the 29th, HD Hyundai Electric(267260) is plunging 12%. The company reported strong second-quarter results, but concerns about profitability are seen as the reason.
As of 9:53 a.m. that day, HD Hyundai Electric was trading at 608,000 won on the Korea Exchange, down 97,000 won (13.76%) from the previous session.
Earlier, HD Hyundai Electric said the previous day that it posted second-quarter sales of 1.1418 trillion won and operating profit of 287.0 billion won this year. Both increased 26% and 37.3%, respectively, from a year earlier, in line with market expectations (sales of 1.1117 trillion won and operating profit of 285.2 billion won). All business segments, including power equipment, power distribution equipment, and rotating machinery, showed even performance improvement.
However, concerns were raised that a shift to the relatively low-profitability power distribution institutional sector and battery energy storage systems (BESS) would lead to a slowdown in profitability. Na Min-sik, a researcher at SK Securities, said, "Scale is growing, but a slowdown in profitability has continued since the second quarter of last year." In particular, the company said in negotiations with big tech companies that revenue in the power distribution institutional sector would not ramp up in earnest until after 2029.
IBK Securities on that day lowered its target price for HD Hyundai Electric to 1.2 million won from 1.5 million won. While medium- to long-term growth potential is sufficient, the change reflects valuation adjustments across the industry.