HD Hyundai Electric and LS Electric See Increased Investment Attractiveness
NH Investment & Securities has raised its target stock prices for both HD Hyundai Electric and LS Electric, signaling increased investor confidence in the domestic electric equipment industry. The upgrades reflect anticipated long-term growth driven by rising power demands and strategic expansions by both companies.
HD Hyundai Electric: Expansion in North America
NH Investment & Securities raised its target stock price for HD Hyundai Electric from 1.05 million won to 1.2 million won, a 14% increase. This positive outlook is based on expectations of sustained investment in power transmission infrastructure in North America due to increasing domestic power loads. LS Securities also predicts continued positive performance for HD Hyundai Electric.
To capitalize on this demand, HD Hyundai Electric is strengthening its presence in the ultra-high voltage transformer market with a novel North American production subsidiary. A groundbreaking ceremony was held for a second factory at the company’s Montgomery, Alabama, manufacturing facility. Expected to be completed in April of the following year, the 29,000 square meter (approximately 8,800 square meters) factory represents a US$200 million investment and will increase ultra-high voltage transformer production capacity by 50%.
According to NH Investment & Securities researcher Lee Min-jae, the demand for on-site power generation is increasing due to challenges in connecting to existing power grids, particularly for data centers. However, the fundamental demand for expanded transmission grids remains strong.
LS Electric: Benefiting from North American Trends
LS Electric also received a significant target price increase from NH Investment & Securities, rising from 670,000 won to 1.05 million won, a 56% jump. This is attributed to external expansion factors, including the growth of data centers, reshoring initiatives in North America, and increased investment in domestic equipment within the United States.
The company is expected to benefit from increased investment by Korea Electric Power and other large domestic companies. NH Investment & Securities forecasts that new domestic load will reach 15GW in the semiconductor industry and 5GW in data centers by 2030, with continued annual increases.
Lee Min-jae noted the unique competitiveness of large domestic companies in supplying power distribution equipment, with overseas competitors struggling to meet the demands of North American data centers. He also highlighted the limited number of companies capable of participating in Korean electric power investment, positioning LS Electric for substantial gains.
New orders in North America are projected to average 900 billion won per year by 2030, with domestic orders in South Korea reaching 1.2 trillion won. LS Electric’s operating profit is expected to increase from 427 billion won in 2025 to 637 billion won in 2026 and 903 billion won in 2027. The operating profit margin is also projected to improve significantly, from 8.6% in 2025 to 13.7% in 2027.
HD Hyundai Electric Company Overview
HD Hyundai Electric Co., Ltd. (formerly Hyundai Electric & Energy Systems Co., Ltd.) manufactures and sells electrical equipment internationally. Yahoo Finance reports the company offers power and distribution transformers, switchgears, motors, generators, and circuit breakers, as well as marine solutions and battery energy storage systems. Founded in 1977 and headquartered in Seongnam-si, South Korea, the company rebranded as HD Hyundai Electric in March 2023.