IBK Investment & Securities recently reevaluated the investment value of Hyosung Heavy Industries and significantly raised its target price. Surpassing the previously set level of 3.3 million won, the target was reset to 4.9 million won, while maintaining the investment rating as 'Buy'. This decision reflects the expectation that the company will continue to expand orders centered on high-value-added products and maintain a rising profit margin trend. Experts have evaluated that this earnings report has confirmed the company's growth drivers are very robust.
This quarter's performance is particularly attracting attention due to the order volume far exceeding expectations. While the quarterly order volume in the heavy industry sector has typically been maintained around 22 trillion won, this first quarter saw the volume surge to nearly double that level at 42 trillion won. This sharp increase is interpreted as a clear signal that demand in the power equipment market, centered on the United States, remains very strong. Especially, the possibility of a relief in the supply shortage in the short term is very low, suggesting that the value of the existing order backlog will increase further.
Hyosung Heavy Industries' financial indicators also support this positive trend. First-quarter heavy industry sales increased by 20.5% compared to the same period last year to 88.7 billion won, and operating profits surged by a remarkable 30.6% to 11.77 billion won. This is because the company sold a large volume of high-margin products riding the boom in the global power equipment market, despite off-season effects such as reduced operating days. Consequently, this serves as clear evidence proving that the company is maintaining a robust growth trend.
In terms of order backlog, the company achieved remarkable results. Total order volume surged by 107.8% year-on-year to 42 trillion won, and the order backlog expanded by 44.4% to 151 trillion won. Moreover, with the U.S. market accounting for 53% of the total, it demonstrates particularly strong influence in the global market. Especially, by firmly securing a leading position in the supply of 765kV class transformers for the U.S.'s top power grid, it is expected to play a key role in future global power grid construction trends.