[Alpha Biz= Reporter Kim Sangjin] Sangsangin Securities maintained its investment opinion and target stock price of KRW 520,000 for Hyosung Heavy Industries on the 17th. We believe that the company will be able to meet market expectations by addressing risk factors in the medium term.
"CAPEX (Capex, Capital Expenditure) of a domestic transformer company that we had been waiting for was announced on the 12th," Sangsangin Securities said. "The announced size is 100 billion won, and we plan to increase the production capacity of ultra-high-pressure transformers by 40% from the current standard."
Sangsangin Securities analyzed, "Hyosung Heavy Industries' announcement of the U.S. CAPEX eventually suggests that the operation of the current U.S. corporation has been completely normalized and that confidence in the long-term business has increased."
"The CAPEX has set the stage for long-term growth due to the simultaneous increase in P (price) and Q," Sangsangin Securities said. "However, as there is still uncertainty about short-term performance, the proportion of exports in the regional mix of high-pressure devices (transformers and circuit breakers) and the mix of non-high-pressure devices is a factor."
The annual growth due to the rising utilization rate of the U.S. production corporation and the scheduled increase in CAPA (production capacity) will increase the North American mix of high-pressure devices, the most profitable sector," adding, "At the same time, the relative advantage in Europe is expected to benefit from the European supply and demand imbalance, which will emerge from the second half of the year, and create export opportunities in the global mix of non-high-pressure devices due to rising demand for high-pressure power devices."
Alphabiz Reporter Kim SangJin(letyou@alphabiz.co.kr)
