Hyosung Heavy Industries makes power equipment such as extra-high-voltage transformers and circuit breakers that carry electricity from power plants to cities, and it also runs a construction business. In the first quarter of 2026 revenue rose 26.2% to ₩1.3582 trillion and operating profit jumped 48.8% to ₩152.3 billion, while its order backlog topped ₩15 trillion, the largest among Korea's three main power-equipment makers. The key point to watch: while AI data centers and the replacement of aging grids pile up several years of transformer work, earnings can climb in steps; but the debt ratio is above 200% and profit is skewed toward the second half of the year, so quarter-to-quarter swings in net profit should be taken into account.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt is somewhat higher than equity (debt ratio 201.5%).
- Revenue rose 21.9% year over year, and the pace is quickening (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 26.2% higher than a year earlier.
- ROE is 22.1% (controlling-interest basis). It is above the sector average.
- Operating margin is 12.5%.
Ownership & governance As of 2025-12-31
Largest shareholder Hyosung 32.47% (corporate)
Controlling bloc incl. related parties 43.96%
With the controlling bloc holding 44%, the ownership structure is stable.
🔎 In-depth analysis
- Hyosung Heavy Industries earns money on two legs.
- The first is heavy industry (power equipment).
- To send electricity generated at a power plant over long distances, the voltage has to be stepped sharply up and then back down, and the extra-high-voltage transformers and circuit breakers used for this are the flagship products.
- In particular, it is one of only a few companies that make 765kV (kilovolt) transformers for the top tier of the U.S. transmission grid.
- The second leg is construction, and together the two businesses generate roughly ₩6 trillion in annual revenue.
- Most of the recent earnings growth is coming from the power-equipment side.
- The latest close is ₩2,770,000 and the market cap is ₩25.8 trillion.
- The price sits below its 20-day line (₩3,413,600) and below its 60-day line (₩3,576,533).
- Trading under both its short- and medium-term moving averages, the trend is on the soft side.
- The RSI (an indicator that compares upward and downward momentum over the past 14 days on a 0-100 scale) is 36.5, a neutral level.
- The one-month change is -19.4%, the three-month change is +6.1%, and it stands -39.8% below its 52-week high.
- Its relative strength versus the KOSPI is 71 (on a 1-99 scale that weights recent returns against the index over the past year more heavily; higher means stronger than the market).
- That places it in roughly the top 28% of all stocks for strength.
- Over the past three months it lagged the index by 23.9%.
- Chart readings are best viewed alongside trading volume and disclosure dates.
- Start with the valuation metrics.
- On last year's reported earnings the P/E ratio (how many years of profit the price equals) is 48x and the P/B (price relative to book equity) is 10.98x, both high on the numbers alone.
- But this is an inflection phase in which profit is growing fast, so a P/E based on last year's earnings can overstate the real burden.
- Profitability is good: ROE (how much is earned in a year on equity) is 22% and the operating margin is 12.5%.
- What stands out is the financial structure.
- The debt ratio (debt against equity) is a high 201%.
- The interest coverage ratio (how many times operating profit covers interest) is 1.35x, so the interest burden is not small.
- On top of that, net debt (total borrowings minus cash, the real debt) is about ₩247.7 billion, so on a debt-adjusted basis the EV/EBIT (enterprise value divided by operating profit, a debt-adjusted version of the P/E) is 43x, on a similar level to the P/E.
- The FCF yield (actual cash generated relative to market cap) is 1%, reflecting a period of large facility and order investment where reinvesting for growth outweighs cash generation.
- The growth trend is clear.
- Revenue rose from ₩4.3 trillion in 2023 to ₩6.0 trillion in 2025.
- Operating profit went from ₩257.8 billion in 2023 to ₩747.0 billion in 2025, roughly tripling in three years.
- Net profit also grew every year, bottoming at ₩29.1 billion in 2022 and reaching ₩519.9 billion in 2025.
- In the first quarter of 2026, growth continued with revenue up 26% and operating profit up 49%.
- However, first-quarter net profit (₩91.3 billion) fell 11.9% from a year earlier.
- This reflected a mix of interest and non-operating costs and a high prior-year base even as operating profit grew sharply; the underlying business itself did not weaken.
- The reasons for higher profit this year are clear.
- The spread of AI data centers and the replacement of aging U.S. grids are concentrating demand for extra-high-voltage transformers, and the company's order backlog has topped ₩15 trillion, several years of work.
- Reflecting this, this year's net profit should exceed last year's, so on a forward basis the multiple comes down below the 48x calculated on last year's earnings.
- The flow confirmed by disclosures centers on orders and governance.
- On May 11 a disclosure of "key management matters related to an investment decision" flagged a large order, tied to the long-term supply of extra-high-voltage transformers for U.S. and North American grids.
- The May 14 first-quarter 2026 report confirmed double-digit growth in both revenue and operating profit.
- Governance and shareholder procedures also moved forward, including a corporate governance report on May 29 and the results of an extraordinary shareholders' meeting and appointment of an outside director on June 2.
- Meanwhile, a May 8 disclosure reported a serious industrial accident.
- Given that the company runs both heavy industry and construction, safety and industrial-accident risk is an item that needs ongoing monitoring.
- Start with the strengths.
- Extra-high-voltage transformers carry a barrier to entry that not just anyone can clear, and the company is one of the few suppliers into the U.S.
- 765kV market.
- The ₩15 trillion order backlog locks in several years of revenue in advance, giving high earnings visibility.
- Demand from AI data centers and grid replacement is expected to run through 2027-2028, so it is hard to call this the end of the cycle.
- The cautions are also clear.
- With a 201% debt ratio and 1.35x interest coverage, financial headroom is not ample, so a spike in interest rates or raw-material prices could squeeze net profit.
- Because profit is concentrated in the second half, quarterly net profit also swings widely.
- In short, the stock is strong while power-infrastructure demand continues and orders convert well into revenue, and weaker when signs of slowing power investment or financial and safety risks surface.
🔎 Valuation vs peers Fairly valued
Compared against three domestic listed makers of power equipment (extra-high-voltage transformers and circuit breakers) whose businesses overlap.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| HD Hyundai Electric | 40.10x | 14.48x | 36.11% |
| LS Electric | 99.12x | 13.73x | 13.85% |
| Iljin Electric | 28.60x | 5.05x | 17.65% |
On last year's reported earnings the 48x P/E is lower than LS Electric (96x) among the three power-equipment makers and similar to HD Hyundai Electric (40x). But this stock is in an inflection phase where profit is growing fast, so a P/E calculated on last year's earnings somewhat overstates the burden. On a forward basis that reflects this year's revenue and operating-profit growth and the order backlog, the multiple falls below 40x. Given the pace of growth, it is hard to call it extremely expensive versus peers. On the other hand, the high debt ratio and the concentration of profit in the second half, which drives large quarterly swings, are factors that limit any valuation premium. All together, it is a fairly valued range that is hard to label either undervalued or overvalued.
Price history Close · MA20 · MA60
The latest close is ₩2,770,000 and the market capitalization is ₩25.8 trillion. The price sits below its 20-day moving average (₩3,413,600) and below its 60-day moving average (₩3,576,533). It is under both its short- and medium-term moving averages, so the trend looks subdued. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 36.5, a neutral level. The one-month change is -19.4%, the three-month change is +6.1%, and the position relative to the 52-week high is -39.8%. Relative strength versus the KOSPI is 71 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 72% of all stocks. Over the past three months it lagged the index by 23.9%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -23.87% / 6M -6.82% / 12M +30.52%
Key metrics vs sector median
Valuation
The P/E of 49.68x is above the sector median (40.10x). The P/B is 10.98x.
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Intrinsic value (DCF estimate)
DCF (discounted cash flow) estimate — discount rate 6.5%, initial growth 10.0%→terminal 2.0%, 10-yr forecast, free-cash-flow basis, forward earnings power normalized 1.289x. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 22.1%, in line with the sector average (22.0%). The operating margin is 12.5%. The debt ratio is 201.5%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $2.9B | $3.2B | $4.0B | +21.93% ↑ faster |
| Operating profit | $170.9M | $240.2M | $495.1M | +106.07% ↑ faster |
| Net profit | $76.9M | $147.6M | $344.6M | +133.52% ↑ faster |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $2.1B | $2.3B | $2.9B | $3.2B | $4.0B |
| Operating profit | $79.6M | $94.9M | $170.9M | $240.2M | $495.1M |
| Net profit | $50.7M | $19.3M | $76.9M | $147.6M | $344.6M |
| Revenue CAGR | 4-yr avg 17.85% | ||||
Revenue rose 21.9% year over year (2023 ₩4.3 trillion → 2024 ₩4.9 trillion → 2025 ₩6.0 trillion), and the three-year trend is 'rising'. The pace of growth also quickened from the prior year. Operating profit rose 106.1% year over year. Profit is growing at an accelerating pace. Over the 5 years on record, revenue compound annual growth (CAGR) is 17.8%. The two-year revenue CAGR is 17.8%. In the most recent quarter (Q1 2026), revenue was 26.2% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- ROE of 22.1% points to solid profitability.
- Revenue grew 21.9% year over year, a sign of growth.
Points to watch
- The figures shown are based on the last annual report as of the writing date, so it is best to review the latest quarterly results and filings alongside them.
Recent news & events searched · sourced
- 2026-05-11FilingDisclosure of key management matters related to an investment decision. It concerns a large extra-high-voltage transformer order, tied to long-term supply for U.S. and North American grids.A larger order backlog improves future revenue visibility (medium-term positive). Source
- 2026-05-14EarningsFirst-quarter 2026 report. Consolidated revenue ₩1.3582 trillion (+26.2%), operating profit ₩152.3 billion (+48.8%), net profit ₩91.3 billion (-11.9%).Confirms continued revenue and operating-profit growth, while net profit fell on non-operating and base effects (near-term neutral). Source
- 2026-05-29FilingDisclosure of the corporate governance report and the large business group status.Routine procedures on governance and affiliate status (neutral). Source
- 2026-06-02FilingResults of an extraordinary shareholders' meeting and filing on the appointment and dismissal of outside directors.Wraps up governance procedures such as changes to board composition (neutral). Source
- 2026-05-08UpdateDisclosure of a serious industrial accident. A safety and industrial-accident matter given the combined heavy-industry and construction business.Safety, reputational and cost risk that needs ongoing monitoring (near-term negative). Source
Figure cross-check computed ↔ external
Recent filings
- 2026-06-02Disclosure
- 2026-06-02Shareholders' meeting notice
- 2026-06-01OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-29Large-business-group status disclosure
- 2026-05-29Corporate governance report
- 2026-05-18Disclosure
- 2026-05-18Shareholders' meeting notice
- 2026-05-14PeriodicQuarterly report
- 2026-05-14Disclosure
- 2026-05-11Disclosure
- 2026-05-08Disclosure
- 2026-04-24Disclosure
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.