IBK Investment & Securities recently reevaluated the investment value of Hyosung Heavy Industries, significantly revising its target price upward. The firm decided to reset its target from the previous 3.3 million KRW level to 4.9 million KRW while maintaining its investment rating as 'Buy'. This decision reflects the expectation that the company will continue to expand orders centered on high-value-added products and sustain a rising margin trend. Experts have assessed that the company's growth momentum is extremely solid, as confirmed by the latest earnings announcement.
This quarter's results are particularly noteworthy due to an order intake that far exceeded expectations. While the quarterly order intake in the heavy industry sector has typically been maintained around 2.2 trillion KRW, the figure for the first quarter surged to 4.2 trillion KRW, nearly doubling. This sharp increase is interpreted as a clear signal that demand in the power equipment market, centered on the United States, remains extremely robust. Specifically, the possibility of a supply shortage being alleviated in the short term is very low, suggesting that the value of existing backlogged orders will grow even further.
Hyosung Heavy Industries' financial indicators also support this positive trend. First-quarter heavy industry sales increased by 20.5% year-on-year to 88.7 billion KRW, and operating profit surged by a remarkable 30.6% to 11.77 billion KRW. This growth was achieved because the company sold a large volume of high-margin products riding on the boom in the global power equipment market, despite seasonal influences such as reduced operating days. Consequently, this serves as clear evidence that the company is maintaining a robust growth trajectory.
The company also achieved remarkable results in terms of backlogged orders. Total orders increased by 107.8% year-on-year to 4.2 trillion KRW, while backlogged orders expanded by 44.4% to 15.1 trillion KRW. Moreover, the U.S. market accounts for 53% of the total, demonstrating particularly strong influence in the global market. The company has firmly established its leading position in the supply of 765kV-class transformers for the top-tier U.S. power grid, and is expected to play a key role in future global power grid construction trends.