[Alpha Biz= Paul Lee] Seoul, June 10 – IBK Investment & Securities announced on Monday that it has raised its target price for Hyosung Heavy Industries from KRW 630,000 to KRW 860,000, maintaining a Buy recommendation. The revision reflects continued strong earnings momentum in Q2 2025, driven by expanding power infrastructure investments in North America.
According to analyst Taehyun Kim, the company is expected to post Q2 consolidated revenue of KRW 1.297 trillion (+8.6% YoY) and operating profit of KRW 120.6 billion (+92.5% YoY). "Profit margins are being bolstered by higher sales contributions from the U.S. and India," Kim noted. In Q1, operating profit margins at the U.S. and India subsidiaries reached 29% and 25%, respectively, and similar levels are anticipated in Q2.
Hyosung Heavy Industries is currently recognizing revenue from orders secured in the second half of 2023 and has already signed supply contracts extending through 2028. Particularly in the U.S., orders for ultra-high-voltage (UHV) circuit breakers are ramping up, contributing to portfolio diversification. Kim estimates that 30–40% of new orders are related to UHV circuit breakers, and notes that sales efforts targeting existing transformer customers are intensifying.
While the company does not yet operate local production facilities in the U.S., the high entry barriers in the UHV market are helping maintain margins comparable to those of its transformer business.
Hyosung's aggressive factory expansion strategy is also seen as a key catalyst. Kim pointed to the expansion of the Changwon plant (with KRW 100 billion revenue potential) and the U.S. plant (approx. USD 200 million revenue potential), adding that further capacity investment is under review. He also highlighted a recent order from xAI as an example of how the company is broadening its reach beyond traditional grid replacements to include data center power solutions.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
