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Hyosung Heavy Industries’ rapid growth is coupled with a huge technological wave called artificial intelligence (AI). As big tech companies like NVIDIA release high-performance GPUs, the power demand for data centers to run them is increasing exponentially. This structural power shortage (shortage of supply) phenomenon presented an unprecedented ‘super cycle’ to manufacturers of power equipment such as transformers and circuit breakers. In particular, Hyosung Heavy Industries ranks first in the U.S. market for 765kV ultra-high voltage transformers, demonstrating its strong dominance in absorbing both the dual demands of replacing aging power grids and expanding new infrastructure. The fact that the factory operation rate has already exceeded 100% for two consecutive years and the order backlog has exceeded 15 trillion won suggests that the supplier-dominated market in which products are sold out will continue for the time being.

However, behind the brilliant report card, the market's cold gaze also coexists. Recently, Hyosung Heavy Industries' stock price has been going through a correction phase, falling from the mid to high 3 million won range to the low 3 million won range. This is not simply due to the concentration of funds in the semiconductor sector. Market experts point out that the time has arrived where actual order results and performance support are more strictly required rather than vague expectations. A high valuation with a price-to-earnings ratio (PER) exceeding 60x means that market expectations have already reached their peak, and the stock price's sensitive response to even small news is a sign that investors' desire to take profits has become stronger.

Corporate governance and policy variables have also emerged as key factors affecting stock prices. Recently, the Korea Exchange made regular changes to the constituents of the Korea Value Up Index and decided to exclude Hyosung Heavy Industries. This is not a deterioration of the company's management strategy or fundamentals, but rather a technical adjustment that occurred during the process of reorganizing the publicly announced companies that fit the purpose of the index. Nevertheless, the market seems to be accepting this as bad news on the supply and demand side. In addition, criticism that it is a 'heavy stock' with limited trading volume due to an excessively high price per share is constantly stimulating the market's demand for stock splits, and this remains an important shareholder-friendly policy task that management must consider in the future.

Hyosung Heavy Industries’ internal stability is becoming more solid under the responsible management of Chairman Cho Hyun-jun. As of the first quarter, the operating profit ratio was close to 14%, and the strategy of reducing costs and focusing on high value-added products was a key driver of performance improvement. In particular, the fact that we are providing future growth engines by securing next-generation technologies such as power semiconductors and high-voltage direct current transmission (HVDC) is a positive factor for long-term investors. Efforts to strengthen overseas market penetration and secure cost defense are evaluated as Hyosung Heavy Industries' unique constitutional improvement process that can overcome the macroeconomic variable of the industry recession. Going beyond a company that simply sells transformers, our move to become an integrated solution company in the era of energy electrification is the basis for maintaining market trust.

Meanwhile, the outlook for the global electricity market remains bright, but its pace may be variable. As the International Energy Agency (IEA) predicts, it is clear that global power grid investment will continue to increase until 2030, but macroeconomic uncertainties such as inflation may increase the cost burden on power facilities. In addition, fierce competition for orders from domestic and foreign companies such as competitors HD Hyundai Electric and LS Electric will put pressure on maintaining margins in the future. In the end, in order for Hyosung Heavy Industries' stock price to break through its previous high once again, the company faces the challenge of speeding up the current order backlog of 15 trillion won into actual sales and providing news of new large orders exceeding this in a timely manner.