[Edaily Reporter Kwon Oh Seok ] NH INVESTMENT & SECURITIES announced on the 29th that it is maintaining its “Buy” rating on HD HYUNDAI ELECTRIC(267260)but lowering its target price from 1.4 million won to 1.25 million won.

Lee Min-jae, an analyst at NH INVESTMENT & SECURITIES, explained, “We are maintaining our investment rating due to: △ the continued supplier-dominated North American ultra-high-voltage transformer market; △ expanded orders for power distribution equipment from Big Tech and the domestic semiconductor industry; and △ mid- to long-term collaboration with HD HYUNDAI HEAVY INDUSTRIES.” He added, “We lowered the target price to reflect the increase in the cost of equity resulting from rising interest rates.”
Based on the target price, the 2028 P/E ratio stands at 18x, making it the most attractively valued among domestic and international power equipment competitors. The analyst noted, “In the ultra-high-voltage transformer segment, improvements in workforce skill levels at the Alabama plant are occurring simultaneously with the expansion of product lines such as 765 kV transformers, so we expect both revenue growth and improved profitability.”
He continued, “Large-scale, long-term supply contracts—such as those for power and distribution equipment with big tech companies—are currently under negotiation for the first half of the year,” and emphasized, “The share of orders for data center power equipment is expected to expand to the 10% range over the medium to long term. Mega-projects to be carried out domestically present a good opportunity to secure competitiveness in distribution equipment, an area that has been relatively weaker compared to ultra-high-voltage transformers.”
On a consolidated basis, second-quarter revenue was estimated at 1.1 trillion won (+26% year-over-year), and operating profit at 287 billion won (+37%), in line with estimates and consensus. He added, “Although revenue from ultra-high-voltage transformers declined due to delivery schedules, both new orders ($1.44 billion) and the order backlog ($8.49 billion) for the second quarter were strong, reflecting a market environment favorable to suppliers.”