晓星重工业 (298040.KS)：管理层上调2026年营收、利润率及订单指引；亚洲首选股

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31 Jul 2026 11:57:56 ET │ 21 pages

Hyosung Heavy Industries

(298040.KS)

Mgt Raised 2026 Revenue, Margin & Order Guidance; Asian Top Pick

CITI'S TAKE

Hyosung Heavy (HH) 2Q26 results were strong with operating profit +60.2%

yoy. Its outlook seems bright with management revising up 2026E revenue,

new order and margin guidance. Extra upside should come from its recently

formed JV with Quanta Services Inc, the biggest US power grid EPC

contractor, which should not only add earnings but also endorse its

competitiveness in winning new orders there. Our 2026-28E net profits are

slightly cut 1-4% with more non-operating losses. We lower our DCF TP

23% to W3.5m for more prudent long-term assumptions. Its 20.0x 2027E

PER and 5.6x are attractive, in our view, with 34% 2026-28E EPS CAGR and

31.7% 2027E ROE. HH is our top pick in both Korean & Asia power

equipment sector.

2Q26 strong profit growth — HH’s operating profit rose 60.2% yoy to W264.3bn in

2Q26. While its 2Q26 net profit was 16.4% below consensus (Bloomberg), we are not

concerned as (i) W60bn revenue from Middle East postponed from 2Q26 to 2H26E,

(ii) less than assumed OP margin rise was probably due to product mix change, and

(iii) there was forex loss and derivative losses. Its new orders in heavy industries

+51.3% yoy to W3,324bn in 2Q26 (and +78.3% yoy to W7.5trn in 1H26) when order

backlog was +63.3% yoy and +16.2% qoq to W17,507bn.

n

Buy

Price (31 Jul 26 15:45)

Target price

from W4,500,000

Expected share price

return

Expected dividend yield

Expected total return

Market Cap

W2,417,000

W3,500,000↓

44.8%

0.5%

45.3%

W22,537,433M

US$15,828M

Price Performance

(RIC: 298040.KS, BB: 298040 KS)

2026 guidance uplifts — HH revised up its 2026E, with (i) new orders to reach

W12.0trn (+58% yoy), including W7.5trn in 1H26; we think the W12.0trn new order

target still too conservative, and we assume its new orders +70% yoy to W13.0trn in

2026E, including +60% yoy to W5.5trn in 2H26E; (ii) heavy industry business

revenue to +25% yoy in 2026E, from +15% yoy previously. This implies its revenue to

+34% yoy to W3.2trn from heavy industries in 2H26E. And (iii) OP margin of heavy

…