[Weekend Money] Power Equipment Stocks Once Overlooked Poised for Rebound in Second Half?

Potential for Positive Second-Quarter Earnings Surprises

Hyosung Heavy Industries' extra high voltage transformer. Stock photo

With the advent of the artificial intelligence (AI) era, there are expectations that stocks related to power equipment—which, along with memory semiconductors, have led the Korean stock market—could regain attention in the second half of the year.

According to KB Securities on July 5, the recent sales and profit forecasts for global power equipment competitors (peers) show that most companies are experiencing upward revisions in their earnings outlooks. The analysis suggests that the simultaneous increase in sales across the industry is not due to specific companies gaining a competitive edge and reshuffling market share, but rather because overall demand is expanding.

KB Securities also highlighted that earnings per share (EPS) are rising even faster than sales, attributing this to a supplier-dominated environment in which companies are able to increase prices, thereby driving up both average selling prices (ASP) and profit margins at the same time. In fact, GE Vernova announced that the average price of orders secured in the first half of 2026 is 10 to 20 percent higher than the order backlog as of the fourth quarter of 2025.

Kim Minkyu, a researcher at KB Securities, stated, "There is still a wide range of forecasts for the second-quarter results of power equipment companies, as updates have yet to be made," and emphasized, "Given the upward revisions to overseas companies' outlooks, there is potential for upgrades to domestic estimates or even positive surprises at the time of second-quarter previews and earnings announcements."

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