NICE Investors Service Upgrades HD Hyundai Electric's Long-Term Credit Rating to 'A+/Stable'

On May 28, NICE Investors Service announced that it would upgrade HD Hyundai Electric's long-term credit rating from 'A/Positive' to 'A+/Stable.'

NICE Investors Service cited several reasons for the upgrade: increased exports due to strong performance in the U.S. transformer market, improved profitability, and a positive outlook for financial stability. Orders for HD Hyundai Electric's ultra-high voltage transformers in the United States have continued to rise, supported by favorable local market conditions. As of the end of March, the company's order backlog stood at approximately 8.4 trillion won.

NICE Investors Service stated, "As related orders have increased, consolidated sales in 2024 reached 2.1045 trillion won, up 22.9% from the previous year, and EBIT-to-sales also improved significantly to 20.1% from 11.7% a year earlier." The agency added, "Given the composition of the order backlog, the company is expected to achieve external growth and maintain a high level of operating profitability in the short to medium term." Regarding concerns over U.S.-imposed tariffs, the agency noted, "The supplier-favored market in the United States is likely to continue in the short to medium term, allowing the company to pass some of the tariffs on to product prices," and added, "Local production is expected to partially alleviate the tariff burden."

The significant improvement in operating cash flow, which has greatly reduced the company's financial burden, was also viewed positively. As of the end of March, HD Hyundai Electric's debt ratio was 180.8%, and its net debt-to-equity ratio was -10.7%. In particular, net debt stood at -453.6 billion won, a decrease of about 1 trillion won compared to the end of 2023 (542.6 billion won). NICE Investors Service commented, "Although there are plans for large-scale investments, including the expansion of the Cheongju medium- and low-voltage circuit breaker plant, the Ulsan plant line, and the second plant in Alabama, United States, by 2026, the company's improved ability to generate operating cash flow is expected to enable it to meet funding needs smoothly and maintain strong financial stability."