[Click eStock] "HD Hyundai Heavy Industries, Endless Growth Momentum...Target Price Raised"

On June 22, Meritz Securities raised its target price for HD Hyundai Heavy Industries from 800,000 won to 900,000 won and maintained its 'Buy' investment rating, anticipating that the company's growth momentum will remain strong, including the potential for additional orders for engines destined for data centers.

Meritz Securities forecasts that HD Hyundai Heavy Industries' Engine & Machinery Division will achieve sales of 6.9398 trillion won and operating profit of 1.9452 trillion won in 2028. These figures represent increases of 83.1% and 180.6%, respectively, compared to estimated sales and operating profit in 2025. Analysts Bae Giyeon and Kim Hyunbi of Meritz Securities explained, "We have factored in the assumption of at least 1GW expansion and the commencement of substantial revenue recognition starting in 2028."

The report also noted that the likelihood of HD Hyundai Heavy Industries securing additional data center engine orders is very high. The two analysts stated, "The first order placed in April was for a four-stroke medium-speed gas engine with an output of about 20MW per unit, each priced at approximately USD 13 million," and added, "Although market data is still limited, this case suggests that sales per 1GW could reach approximately 1 trillion won."

HiMSEN, the company’s proprietary engine brand, currently holds a leading market share of around 25%. This independent intellectual property was developed without technology from Germany or Japan, and its first trial run was successfully completed in July 2000.

The existing production capacity (CAPA) is already slated to be fully utilized for the production of two-stroke engines for ship propulsion and four-stroke engines for marine and other onshore power generation through 2028. Meritz Securities commented, "Given the increase in inquiries for data center-related orders, there is a strong possibility for expansion exceeding the 1GW assumption we have incorporated."

This content was produced with the assistance of AI translation services.