[Edaily Reporter Kwon Oh Seok ] NH INVESTMENT & SECURITIES announced on the 28th that it is maintaining its “Buy” rating on HD HYUNDAI ELECTRIC(267260)but lowering its target price from 1.25 million won to 1.01 million won.

Lee Min-jae, an analyst at NH INVESTMENT & SECURITIES, explained the rationale for maintaining the investment rating, stating, “This is due to the expansion of our client base—centered on North American Big Tech and utility companies—as well as overall capital expenditures spanning ultra-high voltage through medium and low voltage.” Regarding the reason for lowering the target price, he added, “This reflects the increase in the cost of equity resulting from rising interest rates.”
On a consolidated basis, third-quarter revenue was 1.2 trillion won (up 18% year-over-year), and operating profit was 284.5 billion won (up 15%), both in line with estimates. However, the operating profit margin came in at 24%, falling short of the estimate of 26%. The analyst noted, “The inclusion of revenue from the Anja Solar City Battery Energy Storage System (BESS) project (125 billion won) caused the proportion of high-margin North American sales (38%) to drop by 10 percentage points compared to the previous quarter.”
Previously, HD HYUNDAI ELECTRIC decided to make an additional investment of 198 billion won in its Cheongju Power Distribution Campus to meet demand from North American data center customers. The company plans to introduce a logistics automation system with the goal of completing the first production facility (July 2028) and the second production facility (June 2029).
The analyst emphasized, “Annual production capacity is expected to expand by an additional 250 billion won,” adding, “Similar to overseas competitors, the market outlook for North American data centers is positive, and there have been no instances of construction delays in projects with utility customers.”
Furthermore, he added, “We also plan to simultaneously invest in capacity expansions for transformers, switchgear, and rotating machinery,” noting, “Based on 2028 earnings, the price-to-earnings ratio (PER) stands at 12 times, which is 37% lower than the average of overseas competitors (Schneider Electric, Eaton, and ABB). This gap is expected to narrow due to orders from Big Tech companies and capacity expansions.”