Hyosung Heavy Industries: 2Q26 OP missed on impact from Middle East; orders/revenue guidance revised up

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Hyosung Heavy Industries: 2Q26 OP missed on impact from Middle East; orders/revenue guidance revised up

J P M O R G A N Asia Pacific Equity Research

31 July 2026

Hyosung Heavy Industries Overweight

298040.KS, 298040 KS

2Q26 OP missed on impact from Middle East; orders/ Price (31 Jul 26):W2,423,000

revenue guidance revised up Price Target (Jun-27):W4,100,000

Hyosung Heavy’s operating profit was in line with our estimate (W264bn, up 61% Power Equipment and Utilities

ACyoy) and 8% below consensus due mainly to delays in order delivery in the Middle Stephen Tsui, CFA

East market and lower domestic revenues. Operating margin remained strong, with (852) 2800-8592

Power Equipment’s operating margin climbing 4ppt yoy and >7ppt qoq. While stephen.tsui@jpmorgan.com

Heavy Industries orders dropped 20% qoq, to W3.3tn in 2Q, they were in line with Vento Suen

peers’ (like Hyundai Electric, which also saw a 20% qoq decline in new orders). (852) 2800-8546

Order backlog for Heavy Industries expanded a healthy >15% qoq, to >W17tn, vento.suen@jpmorgan.com

which should provide revenue and earnings certainty over the next two to three Alan Hon

years. Management revised up new orders guidance for FY26 for the Heavy (852) 2800-8573

alan.hon@jpmorgan.com

Industries segment from W8.4tn to W12tn. While the hike is meaningful, it still J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

appears conservative to us, as the company achieved W7.5tn in orders in 1H. The Morgan Broking (Hong Kong) Limited

company also revised up revenue growth guidance for the Heavy Industries

segment from 15% to 25%. This implies ~35% 2H revenue growth, which appears

ambitious to us, but shows management’s confidence in a stronger pace of delivery

for the US orders.