[Click eStock] "Hyosung Heavy Industries, Excessive Undervaluation... Target Price Up"

On the 16th, LS Securities raised the target price for Hyosung Heavy Industries from 490,000 KRW to 560,000 KRW, stating that the valuation (stock price level relative to corporate value) discount is excessive, and maintained a buy rating. The closing price on the previous day was 394,000 KRW.

On the same day, Seong Jong-hwa, a researcher at LS Securities, stated, "Considering the limited financial risk, the construction market bottoming out, and the growth potential of the heavy industry sector, Hyosung Heavy Industries' stock price is significantly discounted compared to peer companies."

He forecasted that the consolidated operating results for the third quarter of this year would show sales of 1.2154 trillion KRW and operating profit of 108.5 billion KRW, representing increases of 17% and 15% respectively compared to the same period last year, indicating considerable improvement. Researcher Seong said, "In particular, operating profit is expected to exceed the market average forecast of 95 billion KRW by about 10%, reflecting the base effect from the one-time operating loss (estimated around 25 billion KRW) related to the Cargo Solidarity strike at the construction subsidiary Jinheung Enterprise in the previous quarter."

Researcher Seong highlighted that Hyosung Heavy Industries' performance this year follows a 'low-high' trend. He added, "Both HD Hyundai Electric and LS ELECTRIC showed surprise results in the first half of the year, with the second half expected to be a slowdown compared to the first half, following a high-low trend. In contrast, Hyosung Heavy Industries had particularly weak first-half results this year, but the second half is expected to improve significantly compared to the first half, showing a strong low-high trend in half-yearly performance."

He also added, "Since the main reason for Hyosung Heavy Industries' stock price weakness from May to August was the poor first-half performance, the strong rise last month and this month is judged to be due to expectations for second-half performance."