Samsung Securities has maintained its "Buy" rating for Hyosung Heavy Industries and has substantially raised its target price from 3.03 million won to 4.30 million won. The securities firm stated that despite lower-than-expected revenue and operating profit in the first-quarter earnings release, it views this not as short-term poor performance but as a buying opportunity with strong future growth potential. In particular, compared to the robust order intake in the heavy industry business segment, the current stock price is considered undervalued, and there is a prevailing sentiment recommending active buying to investors.
Hyosung Heavy Industries recorded revenue of 1.3582 trillion won and operating profit of 152.3 billion won for the first quarter on a consolidated basis. While revenue increased by 26.21% and operating profit by 48.77% year-on-year, showing a favorable trend, these figures fell slightly short of the consensus average expected by securities firms. This discrepancy, where actual results came in somewhat lower than the consensus estimates compiled just before the earnings release, may have caused disappointment for some investors. However, securities firms interpret this figure not as simple poor performance but as a temporary phenomenon attributable to specific factors.
To identify the cause of the poor performance, Samsung Securities researcher Han Young-su pointed out that some highly profitable shipments were excluded from the consolidated revenue. He explained that these shipments are currently being transported from the headquarters to the United States and are thus not reflected in the first-quarter results due to consolidation adjustments. This implies that these shipments will be fully reflected in the second-quarter results, supporting the outlook that future performance is likely to be even more robust than current figures. In other words, the first-quarter results represent only a part of the overall business performance, and when viewing the full picture, the company's growth potential is evaluated as even brighter.
Order intake, which is rarely seen as a boom period in the past, far exceeded expectations. The first-quarter order intake in the heavy industry segment reached approximately 4.1 trillion won, a surge of 108% compared to the same period last year. This means more than half (55%) of last year's annual order intake was achieved in a short period, signaling very promising future performance growth. One researcher emphasized that the market is currently experiencing a level of boom unseen before, and while the stock prices of domestic and foreign competitors have surged rapidly, Hyosung Heavy Industries' valuation remains attractive. This suggests that if future earnings releases exceed expectations, the stock price upward momentum could strengthen further.