Name: Is it not too late to buy Hyosung Heavy Industries now? Checking the power infrastructure investment cycle | Myung Min-jun, Park Ga-young, Son Hyun-jung [Stock Beginner Rescue Team]
Uploaded: 2026-05-22T12:30:30+00:00
Duration: 3110 s

Speakers

Son Hyun-jung — Research Fellow

Summary

Son Hyun-jung, a research analyst at Yuanta Securities, explains the structural supercycle in power infrastructure driven by AI data center demand. She identifies four key Korean stocks—Hyosung Heavy Industries, LS Electric, Sanil Electric, and HD Hyundai Electric—as beneficiaries of long-term shortages in transformers and on-site power solutions. The discussion covers valuation, order momentum, and risks such as AI capex pullbacks.

AI data centers are driving a multi-year power demand supercycle, with US demand far outstripping supply.
Hyosung Heavy Industries is favored for its massive US order backlog and undervaluation relative to earnings.
LS Electric, though expensive, gains from the emerging on-site power market and frequent positive catalysts.
Sanil Electric is a smaller-cap stock with high upside tied to the same theme.
HD Hyundai Electric leads the US market for 345-765kV transformers.
Korean manufacturers benefit from labor-intensive production and fast delivery, giving them a global edge.
The biggest risk to the thesis is a slowdown in AI-related capex from big tech.
Recent price corrections in power stocks are attributed to ETF redemption, not fundamentals.

Trade Ideas

Son Hyun-jung Research Fellow 3:08

Hyosung Heavy is undervalued with strong orders.

Hyosung Heavy Industries is attractively valued relative to its earnings power, with a massive order backlog of 4.2 trillion won in Q1 2025 (77% from the US), driven by 765kV ultra-high-voltage transformers needed for AI data center expansion. The company benefits from a multi-year supercycle in power infrastructure, limited global supply capacity, and a shift to higher-margin products. Recent price weakness was due to ETF redemption, not fundamentals, making it a buying opportunity.

Son Hyun-jung Research Fellow 3:42

LS Electric benefits from on-site power.

LS Electric, though not cheap on earnings, deserves a valuation premium because it is the dominant player in the distribution/onsite power segment (e.g., data center internal low-voltage equipment). The on-site power market is newly opening, creating frequent positive catalysts (e.g., Blue Energy orders) that drive momentum. Its 200%+ YTD rally reflects this new growth runway, and further upside is expected as more data center projects materialize.

Son Hyun-jung Research Fellow 12:25

Sanil Electric is small-cap with upside.

Sanil Electric is a smaller-cap but high-upside play in the power equipment cycle. She consistently mentions it as a 'interest stock' alongside Hyosung and LS, implying it has differentiated leverage to the same supercycle theme with a lower market cap and potentially higher growth elasticity. She does not provide as detailed a thesis but includes it as a core holding.

Son Hyun-jung Research Fellow 14:58

HD Hyundai Electric leads US transformer market.

HD Hyundai Electric holds the largest market share in the US for 345-765kV transformers, a segment experiencing severe shortages. Its orders are also heavily US-weighted (73% of Q1 orders) and it is a key beneficiary of the power infrastructure supercycle. While she sees more upside in Hyosung Heavy, HD Hyundai Electric remains a strong long with its own edge in US market penetration and high-margin products.

Is it not too late to buy Hyosung Heavy Industries now? Checking the power infrastructure investment cycle | Myung Min-jun, Park Ga-young, Son Hyun-jung [Stock Beginner Rescue Team]

Summary

Trade Ideas

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