[Click eStock] "Profitability Stabilizing at 20% Possible... HD Hyundai Electric, Target Price Up"

Sangsangin Securities on the 24th raised the target price for HD Hyundai Electric from 400,000 KRW to 480,000 KRW, stating that "it is possible to stabilize annual profitability in the 20% range this year." The buy rating was also maintained.

On the same day, Kim Kwangsik, a researcher at Sangsangin Securities, said, "The second-quarter earnings significantly exceeded estimates, and the main factors driving earnings growth are expected to continue throughout the year."

HD Hyundai Electric's second-quarter results showed sales of 916.9 billion KRW, up 42.7% year-on-year, and operating profit of 210 billion KRW, an increase of 256.9%, greatly surpassing market expectations. In particular, sales in the North American region reached 316.9 billion KRW, growing 88.7%, continuing high growth.

Researcher Kim analyzed, "The simultaneous growth of ultra-high voltage and distribution transformers was a key factor. Estimated distribution transformer sales appear to have grown to around 80 billion KRW compared to the previous quarter," adding, "The North American share rose to 35%, and it is judged that overlapping policies benefiting from high exchange rates contributed to these results."

The main factors driving earnings growth are expected to continue annually. Researcher Kim said, "The North American portion of the order backlog is approaching 60%, and the leverage effect from the planned transformer production capacity expansion in September and increased demand in the distribution and rotating sectors will continue," adding, "Reflecting this, the price-to-earnings ratio (PER) based on next year's earnings is 15.6 times. Considering that the global peer group (PEER) next year is around 25.2 times, there is ample room for further upside."