[E-Daily Reporter Kwon Oh Seok ] Yuanta Securities Korea announced on the 14th that it is maintaining its “Buy” investment rating and target price of 1.45 million won for HD HYUNDAI ELECTRIC(267260).

Son Hyun-jung, an analyst at Yuanta Securities Korea, said, “We expect second-quarter revenue to reach 1.1077 trillion won (+22.2% year-over-year) and operating profit to reach 290.3 billion won (+38.8%), in line with consensus estimates. We estimate revenue by business division to be 629.2 billion won for power equipment (+30.0%), 162.1 billion won for rotating machinery (+11.0%), and 211.5 billion won for power distribution equipment (+10.0%)," she analyzed.
He added, “We believe that for power equipment, expanded sales of ultra-high-voltage transformers to North America and a product mix featuring high-value-added items will drive earnings growth. For distribution equipment, rather than its contribution to second-quarter earnings, attention should be focused on its expanding contribution to mid- to long-term revenue growth resulting from increased utilization rates at the Cheongju distribution campus.”
He further explained, “Profit margins are expected to remain structurally high. While volatility may occur depending on the concentration of quarterly volume, considering the conversion of high-priced order backlog into sales and the product mix centered on power equipment, we expect an OPM (operating profit margin) in the 26% range to be achievable in the second quarter as well.”
Analyst Son noted, “The company recently expressed confidence in expanding new orders through a tour of the Cheongju Power Distribution Campus and a meeting with the CEO. It has raised its 2026 new order guidance by 22.8%, from the previous $4.222 billion to $5.185 billion. This is not merely due to strong demand, but rather because visibility on production ramp-up has improved, driven by workforce recruitment at the Ulsan and Alabama plants, increased standardized production volumes, and a higher proportion of repeat production,” he assessed.
He added, “The 1.1 trillion won data center power infrastructure contract with a major North American tech company also warrants attention. The product mix is roughly 50:50 between ultra-high-voltage transformers and power distribution equipment, demonstrating that the scope of orders—which was previously centered on ultra-high-voltage products—is expanding to include power distribution equipment,” he said. “We expect these orders to begin contributing to revenue in earnest starting in 2027 and to drive earnings growth through 2029. It is also positive that the company has secured a track record of winning package orders from major North American tech companies.”
He further noted, “A key change is that visibility into revenue growth for 2027–2028 has improved thanks to the upward revision of order guidance and the securing of data center package orders,” adding, “The earnings structure based on a high-margin order backlog remains intact, and the growth drivers are expanding from ultra-high-voltage transformers to power distribution equipment and rotating machinery.”