[Click e-Stock] "HD Hyundai Infracore Expected to Exceed Market Expectations in Q2"

On June 18, Hanwha Investment & Securities projected that HD Hyundai Infracore’s second-quarter results would exceed market expectations. The target price was raised to 15,000 won.

Hanwha Investment & Securities estimated that HD Hyundai Infracore would record second-quarter sales of 1.1329 trillion won and an operating profit of 77.5 billion won. This represents a 2.2% increase in sales and a 5.0% decrease in operating profit compared to the same period last year. The company cited expectations for a recovery in European exports and stronger-than-expected engine profitability as the basis for its projection that results would surpass market expectations.

Bae Sungjo, a researcher at Hanwha Investment & Securities, estimated that the construction equipment division would post sales of 828.7 billion won and an operating profit of 29.1 billion won in the second quarter.

Bae explained, "While tariff uncertainties persist in North America, we believe that demand in Europe is rebounding following consecutive ECB rate cuts. In emerging regions, strong mining demand in Asia and Africa is expected to have offset weakness in other areas."

He added, "We have reflected the sales increase from the integration of the Yantai subsidiaries in China (HDI+HCE) into our estimates starting from the second quarter. We also expect profitability to improve as factory utilization rates rise."

The high-margin engine division is expected to deliver solid results. Bae estimated, "Second-quarter engine division sales will reach 304.2 billion won, with operating profit at 48.4 billion won. The average monthly export value of diesel and gas engines from the Incheon region in April and May increased by 29% compared to the first quarter. Although the combined export value for April and May decreased by 4% year-on-year, it is encouraging that the proportion of high-margin gas engines rose from 14% to 31%."