[E-Daily Reporter Shin Ha-yeon ] On the 14th, Yuanta Securities Korea maintained its “Buy” rating and target price of 5 million won for HYOSUNG HEAVY INDUSTRIES(298040), noting that the company’s earnings resilience and order visibility remain intact despite the recent stock price correction. The firm forecasts that orders for ultra-high-voltage power equipment will continue, driven by investments in North American power grids and expanding power demand from data centers.

Son Hyun-jung, an analyst at Yuanta Securities Korea, stated, “We expect HYOSUNG HEAVY INDUSTRIES to post second-quarter revenue of 1.7417 trillion won and operating profit of 272.2 billion won, in line with consensus estimates.” She added, “Profit improvement is expected to accelerate as orders for the U.S. market—for which profit recognition was partially delayed in the first quarter—are reflected, and as the high-margin order backlog, centered on ultra-high-voltage transformers for North America, is converted into revenue.” However, she explained, “We have adjusted our previous estimates to account for the possibility of delayed revenue recognition for some projects in the Middle East.”

Analyst Son predicted that, by business division, the Heavy Industries segment would show the most notable improvement in performance. He said, “The Heavy Industries segment is benefiting from a product mix shift toward high-value-added products for North America, while the Construction segment is recovering from the losses recorded in the same period last year and will contribute to the stability of consolidated earnings.”

He also forecast that order momentum would continue. Analyst Son said, “New orders for the Heavy Industries division exceeded 4 trillion won in the first quarter, setting a record high for a single quarter, and new orders of over 2 trillion won are expected in the second quarter as well.” He added, “Given that cumulative new orders for the first half are highly likely to have already achieved a significant portion of the existing annual guidance, there is a high probability that the guidance for new orders in the Heavy Industries division will be revised upward when the second-quarter earnings are announced.” He added, “The quality of the order backlog is also continuing to improve through an expansion of orders for 765kV ultra-high-voltage transformers.”

In particular, he assessed that the company’s competitiveness in the North American market is set to strengthen further. Analyst Son stated, “As investment in North American power grids aligns with power demand from data centers, the trend of expanding orders centered on ultra-high-voltage products is expected to continue,” adding, “The recent establishment of a joint venture with Quanta Service to produce ultra-high-voltage circuit breakers is a new investment highlight.” He continued, “HYOSUNG HEAVY INDUSTRIES is the only domestic power equipment manufacturer to have secured production bases for both ultra-high-voltage transformers and ultra-high-voltage circuit breakers in the U.S., and its competitiveness in securing ultra-high-voltage package orders in North America is expected to strengthen.”

Analyst Son noted, “Quanta is the largest power and energy infrastructure EPC company in the U.S. and has a customer base comprising utilities and data centers,” adding, “We view this joint venture as a factor that will drive upward revisions to earnings per share (EPS) for 2027–2028, as it provides HYOSUNG HEAVY INDUSTRIES with a channel to access demand for ultra-high-voltage circuit breakers for big tech data centers.” He went on to emphasize, “Despite the recent stock price correction, the company’s earnings resilience and order visibility remain intact.”