Corporate Logo(source: hyosungheavyindustries.com)
NH Investment & Securities announced on June 30 that it is maintaining a “Buy” rating on Hyosung Heavy Industries (298040), while raising its target price by 75% from 600,000 won to 1,050,000 won. The stock closed at 857,000 won in the previous session.
Lee Min-jae, an analyst at NH Investment & Securities, cited several reasons for the upward revision: a 32% increase in EBITDA (earnings before interest, taxes, depreciation, and amortization) due to a change in the base year; an increase in the EV/EBITDA multiple from 15 to 17 times; and the inclusion of 500 billion won in operating value for the construction segment, which was previously valued at zero, factoring in the recovery of the domestic real estate market. Based on the new target, the 2026 PER (price-to-earnings ratio) for the heavy industry division is 24 times, aligning with industry peers.
Lee also noted, “Over the past four quarters, order intake from North America and Europe accounted for 46%, but revenue from these regions comprised only 34%.” He added, “As this high-margin backlog is converted into sales, profitability is expected to improve. From this year onward, the company is likely to achieve profitability comparable to its competitors.”
According to Lee, the ongoing expansion of ultra-high-voltage transformer facilities in Changwon and Memphis, which began in June 2024, is expected to be completed within this year or next. An additional investment in the Memphis facility is scheduled for May 2025, with completion anticipated by 2027. This expansion is expected to further boost profitability through increased sales in the U.S. ultra-high-voltage transformer market.
As a result, NH expects second-quarter earnings to meet market expectations. On a consolidated basis, revenue is forecast at 1.2 trillion won (up 5% year-on-year), and operating profit at 120.5 billion won (up 92%). Segmental operating margins are projected at 13% for heavy industry and 3% for construction.
*[KOSPI] Hyosung Heavy Industries(298040), a subsidiary of the Hyosung Group, produces and sells essential equipment for the power industry such as transformers, circuit breakers, as well as industrial production equipment including motors and gears. The market capitalization is 7.99 trillion won (as of June 27, 2025, closing price).
Corporate Logo(source: hyosungheavyindustries.com)
NH Investment & Securities announced on June 30 that it is maintaining a “Buy” rating on Hyosung Heavy Industries (298040), while raising its target price by 75% from 600,000 won to 1,050,000 won. The stock closed at 857,000 won in the previous session.
Lee Min-jae, an analyst at NH Investment & Securities, cited several reasons for the upward revision: a 32% increase in EBITDA (earnings before interest, taxes, depreciation, and amortization) due to a change in the base year; an increase in the EV/EBITDA multiple from 15 to 17 times; and the inclusion of 500 billion won in operating value for the construction segment, which was previously valued at zero, factoring in the recovery of the domestic real estate market. Based on the new target, the 2026 PER (price-to-earnings ratio) for the heavy industry division is 24 times, aligning with industry peers.
Lee also noted, “Over the past four quarters, order intake from North America and Europe accounted for 46%, but revenue from these regions comprised only 34%.” He added, “As this high-margin backlog is converted into sales, profitability is expected to improve. From this year onward, the company is likely to achieve profitability comparable to its competitors.”
According to Lee, the ongoing expansion of ultra-high-voltage transformer facilities in Changwon and Memphis, which began in June 2024, is expected to be completed within this year or next. An additional investment in the Memphis facility is scheduled for May 2025, with completion anticipated by 2027. This expansion is expected to further boost profitability through increased sales in the U.S. ultra-high-voltage transformer market.
As a result, NH expects second-quarter earnings to meet market expectations. On a consolidated basis, revenue is forecast at 1.2 trillion won (up 5% year-on-year), and operating profit at 120.5 billion won (up 92%). Segmental operating margins are projected at 13% for heavy industry and 3% for construction.
*[KOSPI] Hyosung Heavy Industries(298040), a subsidiary of the Hyosung Group, produces and sells essential equipment for the power industry such as transformers, circuit breakers, as well as industrial production equipment including motors and gears. The market capitalization is 7.99 trillion won (as of June 27, 2025, closing price).