Leeno Industrial, KEPCO KPS, HD Hyundai Heavy Industries, KEPCO E&C, Hanwha Vision | Cha Young-joo, Director of Wise Economic Research Institute
리노공업•한전KPS•HD현대중공업•한전기술•한화비전 | 차영주 와이즈경제연구소 소장 [집중 오늘의 주식]
Speakers
Cha Young-joo
— Director, Wise Economic Research Institute
Summary
Cha Young-joo, Director at Wise Economic Research Institute, reviews recent analyst reports on Leeno Industrial, KEPCO KPS, HD Hyundai Heavy Industries, KEPCO E&C, and Hanwha Vision. He highlights the Korean memory leaders' pause, Leeno's high-margin socket growth, KEPCO KPS's cost shock versus dividend appeal, HD Hyundai Heavy Industries' LNG order strength but slowing growth, KEPCO E&C's accounting noise and nuclear design upside, and Hanwha Vision's TC bonder-related plunge as a buying opportunity.
- Korean memory leaders are taking a breather but remain the market's core leadership group.
- Leeno Industrial reported resilient high-margin R&D socket demand and expected 2Q mass production.
- KEPCO KPS missed 4Q operating profit estimates due to higher variable costs, but its dividend story drew a higher target.
- HD Hyundai Heavy Industries benefits from favorable LNG carrier orders, though order backlog and growth rates are slowing.
- KEPCO E&C's results were distorted by accounting changes, while nuclear design and NRC certification remain positive hints.
- Hanwha Vision plunged on SK hynix TC bonder concerns that Kiwoom considers overdone.
- The speaker emphasized report-study discipline and watching next-quarter results for cost shocks.
Ideas
High-margin socket demand and capacity growth
SK Securities raised its target price to 115,000 KRW on a 17% increase to 2026 operating profit forecasts and a 46x PER. Although 4Q revenue and operating profit fell quarter-on-quarter, they beat consensus because high-margin R&D socket demand was resilient. A major North American smartphone customer's next-generation AP package is driving higher sample orders for the highest-ASP R&D socket, with mass production expected from 2Q and capacity expansion through 2027-2029. Leeno has a wide moat, with around 50% operating margin and over 40% net margin, and has secured all top AP customers including a Taiwan AP maker.
Memory leaders' pause not trend reversal
The Korean memory semiconductor leaders remain the market's core leadership group. Samsung Electronics and SK hynix are taking a breather, but this is a pause within an uptrend rather than a trend reversal; with both still trading below roughly 10x PER, the process of prices catching up to earnings should eventually resume. Investors should not sell the leaders just because laggards are moving.
Dividend appeal versus cost uncertainty
Meritz raised its target price to 70,000 KRW, but 4Q operating profit missed badly at 19.3bn KRW versus 57.8bn consensus due to higher variable costs from overseas nuclear/hydro sales and planned preventive maintenance outsourcing, plus safety management costs. It is unclear whether these costs are one-off or structural; 2026 cost direction is uncertain and 2025 operating margin was the lowest since 2016. The bull case rests on a stable dividend-growth story, with payout ratio assumption raised to 60-65%, potential higher KEPCO capex, and a possible narrative shift to growth if US nuclear cooperation and APR1400 maintenance participation materialize. Next quarter's results are critical; if 1Q repeats 4Q weakness, valuation should change.
LNG order strength supports margin expansion
Kiwoom Securities set a target price of 810,000 KRW. 4Q sales rose 29% year-on-year and operating profit reached 570bn KRW with 11% operating margin, helped by favorable FX, productivity gains, and the HD Hyundai Mipo merger, though bonuses and delayed engine deliveries weighed on the quarter. 1Q is expected to improve because bonuses are absent and margins could rise to 14%. LNG carrier order conditions are favorable: 2026 new order target is $10.5bn, LNG share is rising, Chinese yards are limited in LNG technology, and US, Qatari, and Mozambican projects are tightening dock slots and raising bargaining power. However, order backlog is declining and sales/operating profit growth rates decelerate into 2027, so order intake is the key watch item.
Korean nuclear design growth despite accounting noise
Hana Securities set a target price of 220,000 KRW. 4Q operating profit missed consensus; revenue rose but accounting changes, including R&D service orders moving from non-operating income to revenue and SG&A reclassified into COGS, made underlying growth limited. Nuclear revenue increased, Saeul 3/4 entered construction, and Czech Dukovany results should begin to be reflected, while energy new business and overseas projects such as Indonesia were weak. The report points to NRC design certification-related intangible asset amortization for the Korean APR1400 reactor as a positive hint, and the speaker expects nuclear, energy, and reactor-related business to increase.
TC bonder slump is buying opportunity
Kiwoom Securities views Hanwha Vision's recent plunge as an overreaction to concerns that SK hynix's TC bonder investment will miss expectations. Kiwoom expects SK hynix's 2026 capex to exceed market expectations and TC bonder purchases to rise above market expectations, from 105 to 120 units. The report calls the short-term plunge a low-price buying opportunity and makes Hanwha Vision a semiconductor equipment top pick with a 90,000 KRW target price. Operating profit is expected to improve through 2026, reaching around 50bn KRW in 2Q, 81.4bn in 3Q, and 90bn in 4Q. The speaker notes the chart may take a breather near term.
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Speakers: Cha Young-joo · Tickers: 058470.KQ, 005930.KS, 000660.KS, 051600.KS, 329180.KS, 052690.KS, 489790.KS