[Edaily Reporter Park Soon-yeop] While domestic power equipment stocks have recently plummeted, resulting in valuations lower than those of their overseas competitors, analysts suggest that the second-quarter earnings season could mark a turnaround. Amid expanding investment in North American data centers and ongoing shortages of power distribution equipment, coupled with the impact of a strong won, the consensus is that domestic power equipment companies can maintain their earnings growth momentum.
Lee Min-jae, an analyst at NH Investment & Securities, stated in a report on the 11th, “The valuations of domestic and foreign power equipment companies have reversed in just one quarter,” adding, “The second-quarter preview season, set to begin in late June, will provide an opportunity for domestic power equipment valuations to recover.”

According to NH Investment & Securities, the expected price-to-earnings ratio (PER) for domestic power equipment companies in 2028 is 22 times, which is lower than the average of 23 times for overseas competitors. The stock prices of domestic power equipment companies have fallen by an average of 38% compared to one month ago. In particular, #HDHyundaiElectric and #HyosungHeavyIndustries, which focus on ultra-high-voltage transformers, have dropped by more than 30% compared to three months ago.
Despite the stock price correction, the industry outlook is still considered robust. The North American data center market continues to expand steadily despite some project delays. The analyst cited ongoing competition to secure additional power sources, such as fuel cells and marine engines, as evidence of growing power demand from data centers.
The shortage of power distribution equipment is also likely to persist for the long term. Global power distribution equipment manufacturers such as Schneider Electric, Eaton, and ABB are raising prices for data center equipment due to rising costs, and lead times are also increasing. The outlook suggests that the supply shortage could intensify further as the Chinese market recovers and data center investments expand in regions outside the U.S.
Analysts suggest that second-quarter earnings could serve as a catalyst for a turnaround in stock prices. When first-quarter earnings were announced, domestic power equipment companies confirmed their high potential for mid- to long-term growth compared to overseas competitors, based on sharp improvements in performance and an expansion of orders. NH Investment & Securities expects this growth trend to continue in the second quarter. Considering the strong won and seasonal factors, results are likely to exceed market expectations overall, and orders centered on the U.S. market and big tech companies are expected to continue.
The firm maintained #LS and #LS ELECTRIC as its top picks within the sector. LS Group is expected to benefit not only from continued order growth centered on North American Big Tech but also from domestic data center investments and expanding semiconductor demand.
HD Hyundai Electric was cited as a stock set to benefit from the strong won. The analyst explained, “While a strong won is positive for exporters, the degree of exchange rate exposure varies by company,” adding, “The profit-boosting effect of the high exchange rate in the second quarter is expected to be significant, and HD Hyundai Electric is projected to benefit from this.”