Hyosung Heavy Industries Set to Benefit from North American Market Upside [Click eStock]

Mirae Asset Securities Sets Target Price at 5 Million Won

On July 15, Mirae Asset Securities maintained its “Buy” investment rating for Hyosung Heavy Industries and set a target stock price of 5 million won.

Kim Taehyung, an analyst at Mirae Asset Securities, stated, “Compared to the current share price, there is an upside potential of 86.8%, making Hyosung Heavy Industries our top pick within the power equipment sector.” He also added that considering aggressive capacity expansion and profitability resulting from local production in the United States, the company’s industry-average valuation is justified relative to competitors.

According to analyst Kim, Hyosung Heavy Industries is rapidly increasing its order share, focusing on the North American market. The company owns the only plant in the U.S. capable of producing 765kV-class transformers (located in Memphis) and ranks first in cumulative transformer installations of that type. Since early 2022, the company has been expanding orders for extra-high voltage projects mainly from utility companies, with North America accounting for 77% of orders in the first quarter of this year.

The proportion of revenue from North America also nearly doubled, rising from 17% in 2023 to 33% in the first quarter. He forecasted, “Given that it typically takes three years from order to revenue recognition for these products, the trend of increasing North American revenue share is likely to continue in the mid- to long-term.”

Analyst Kim added that a re-evaluation of the stock is expected as the profit contribution from the heavy industries division increases. He explained that, although the company has historically been discounted relative to pure power equipment companies due to its portfolio being concentrated on construction, this discount factor is expected to gradually be resolved as profit growth in the heavy industries division materializes.

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