[Click eStock] "HD Hyundai Electric, Expanding Data Center-Originated 'Ultra-High Voltage Transformers'... Target Price Up"

NH Investment & Securities on the 26th raised the target price of HD Hyundai Electric to 350,000 KRW, an increase of 20%. The analysis indicates that orders for power equipment continue in the North American region, and with the increase in data centers, the demand for ultra-high voltage transformers will also keep rising.

HD Hyundai Electric Ultra-High Voltage Transformer

Minjae Lee, an analyst at NH Investment & Securities, stated in the report on the same day, "HD Hyundai Electric is currently discussing orders with delivery targets as far as 2030," adding, "If ultra-high voltage transformers are added in the second half of this year and medium- and low-voltage circuit breakers are expanded next year, the scale of profits will further increase."

The analyst explained, "Transformer prices in the U.S. remain at a high level," and "considering the sales proportions by region and product, we raised the EBITDA forecast by 6% and increased the enterprise value (EV) to EBITDA multiple from the previous 15 times to 17 times due to the stock price rise of competitors, thereby raising the target price." He also evaluated that "the price-to-earnings ratio (PER) based on the target price is 25 times, which is similar to overseas competitors."

He forecasted, "To supply ultra-high voltage transformers for data centers, which require high-priced, high-spec products, a delivery track record is necessary," and "considering that related demand has begun to increase in earnest, the sales proportion of ultra-high voltage transformers is expected to more than double within the next five years." He added, "Additional scale expansion can be sufficiently expected depending on the investment scale of big tech companies in data centers."