JP Auto/Parts/Tires Preview, Asia Power Equipment; Key debate & 2Q26 Preview, LG ES First Glance

研报英文原文证据摘录

JP Auto/Parts/Tires Preview, Asia Power Equipment; Key debate & 2Q26 Preview, LG ES First Glance

oncerns about flattening T&D equipment

prices, US UHV transmission delays, and a high 1Q order base.

• We believe high-voltage T&D pricing will remain resilient (~40% OPM for UHV, YTD pricing up high single digit YoY),

supported by slow capacity expansion (i.e. Siemens announced US capacity expansion last yr with little progress in the past 1

yr due to environmental issues), limited EM penetration in the US, and strong utility/data center demand. US UHV delays are

seen as near-term scheduling issues, not structural demand weakness, as grid constraints and underinvestment persist. BTM

generation for data centers is gaining momentum, but T&D demand remains robust due to renewables, electrification, and

replacement needs.

• While 2Q26 results (Stephen’s 2Q26 Preview - here) may be less exciting for names like Hyosung Heavy due to a high base

and Middle East order delays, we view this as an opportunity to accumulate quality names, with Hyosung Heavy attractive

below KRW 3,000k (<20x 2028E P/E). Korean names like HDE and Hyosung Heavy trade at a discount to LS Electric due to

lower direct data center exposure, but this gap could narrow as they win more DC orders (Hyosung announced JV with

Quanta Service, Hyundai Elecctric announced $700mn direct supply to AIDC order). Country concentration risk is mitigated

by growing order wins outside the US (e.g., Australia, India, Europe). Indian capacity expansion is not yet a material threat to

US T&D demand. Overall, we see current concerns as near-term and maintain a constructive view on quality Korean power

equipment names.

• Investor Feedback: Noting growing investor skepticism on FTM solution providers, including T&D names, post-FERC